THE  LAW  OF 


VOLUNTARY  SOCIETIES 


AND 


MUTUAL 


BENEFIT  INSURANCE. 


WILLIAM   C.  NIBLACK, 

OP    THE    CHICAGO    BAB. 


CHICAGO: 

CALLAGHAN   &  COMPANY. 

1888. 


Entered  according  to  Act  of  Congress,  in  the  year  1888, 

By  CALLAGHAN  &  CO., 

In  the  Office  of  the  Librarian  of  Congress  at  Washington,  D.  C. 


1- 


PREFACE. 


A  work  on  the  subject  of  mutual  benefit  insurance,  especi- 
ally at  present,  must  be,  to  a  very  considerable  extent,  an 
abstract  or  compilation  of  decisions.  This  is  largely  true  of 
all  text  books  in  the  law,  but  it  is  particularly  so  in  the  field 
traversed  by  the  author.  Principles  have  been  stated  and  dis- 
cussed, wherever  this  seemed  practicable  and  desirable,  but 
whatever  of  value  this  work  may  possess  will  be  found  to  lie 
in  the  collection  of  adjudicated  cases.  The  facts  and  points  de- 
cided in  these  cases  the  author  has  diligently  sought  to  state 
accurately  and  clearly. 

In  treating  the  subject  of  incorporated  voluntary  societies, 
it  is  difficult  to  determine  how  much  of  the  general  law  of  cor- 
porations should  be  included;  and,  in  considering  the  contract 
of  mutual  benefit  insurance,  the  exercise  of  some  discretion 
is  required  to  determine  how  much  of  the  law  applicable  to  life 
insurance  generally  should  be  discussed.  It  has  seemed  to  be 
the  wisest  course  to  exclude  any  general  treatment  of  the  law 
of  corporations  or  of  insurance,  and  to  confine  this  work  strictly 
to  the  scope  indicated  by  its  title.  Such  subjects,  therefore, 
as  are  fully  considered  in  standard  text  books  on  both  these 
large  topics,  are  here  either  mentioned  incidentallv,  or  not  at 
all. 

Many  recent  cases  cited  in  the  notes  have  not  yet  been  pul)- 
lishcd  in  the  regular  series  of  reports.  Such  as  were  puljlished 
while  the  work  was  in  the  press  are  given  in  the  table  of  cases, 
with  the  vohime  and  page  of  the  re]-»ort  in  which  each  ap]^ears. 

Chicago,  October  1,  ISSS.  W.  0.  N. 

(iii) 


LIST  OF  CHAPTERS. 


Part  I. 
CHAPTER   I. 

PAGES 

Charter  and  Constitution 1-12 

CHAPTER  11. 
By-laws 13-34 

CHAPTER   III. 
Membersiiip 35-1 10 

CHAPTER  lY. 

Suits  by  or  against  an  Unincorporated  Society 111-116 

CHAPTER  V. 
Liability  of  Members 1 17-137 

CHAPTER    YI. 
Officers 138-145 

CHAPTER   YII. 
Meetings  of  the  Society 146-150 

CHAPTER  YIII. 
Jurisdiction  of  Courts  over  Societies 151-189 

(V) 


Part  II. 

CHAPTER  IX. 
Mutual  Benefit  Societies 191-196 

CHAPTER  X. 
Certificate   of  Membership 197-211 

CHAPTER  XL 
Who  may  be  Beneficiary;  Insurable  Interest, 212-235 

CHAPTER  XII. 

Designation  and  Change  of  Beneficiary 236-301 

CHAPTER  XIII. 
Membership  Fee 302-303 

CHAPTER  XIY. 
Assessments 304-369 

CHAPTER  XV. 
Action  on  the  Contract  of  the  Society 370-428 

CHAPTER  XYI. 

Payment  of  Benefit  Fund 429-437 

(vi) 


TABLE  OF  CASES. 


SECTION. 

Abbott  V.  Cobb,  17  Vt.  593,  113 

Abe  Lincoln  Mutual  v.  Miller, 

33  111.  App.  341,  393 

Abels  V.  McKeen,  18  N.  J.  Eq. 

463,  135,  150 

Adams  v  Otterback,  15   How. 

539  326 

Addison   v.    N.  E.    Ass'n.  144 

Mass.  591,  255 

Aetna  Life  etc.  v.  France,  94 

U.S.  561,  177,374 

Aetna  Ins.  Co.  v.  Maguire,  51 

111.  343,  339 

Affnew  V.  A.  0.  U.  W.,  17  Mo. 

App.  254,  277,  284 

Albert  v.  Chosen  Friends,  34 

Fed.  Rep.  721,  363,  383 

Alexander  v.  N.  W.  Masonic, 

111..  348 

Allemania  Ins.  Co.  v.  Little,  30 

111.  App.  431,  371 

Allen  V.  Hoyt,  5  ]\Iet.  334,     357,  365 
Allnut  V.  High  Court,  Mich., 

28  N.  W.  Rep.  803,  31,  43,  73 

Alsatian  Society,  35  Pa.  St.  79, 

38 
Altman  v.  Benz,  27  N.  J.  Eq. 

331,  153 

American  Mutual  v.  Ilelburn, 

Ky,  280 

American    Mutual    v.    Quire, 

Ivy.,  384, 317 

American  Ins.  Co.  v.  Robert- 

sliaw,  36  Pa.  St.  189,  177 


SECTION. 

American 'Ins.  Co.  v.  Schmidt, 

19  Iowa  503,  283 

Amesburv   v.   Bowditch    Mu- 
tual, 6  Gray  596,  15,  373 
Anacosta  Tribe  v.  Murbach,  13 

Md  91,  365,  414 

Anderson's  Appeal,  85   Pa.  St. 

203,  260 

Andes  Ins.  Co.  v.  Fish,  71  111. 

620,  371 

Andrews  and  Alexander's  case, 

8  Eq.  176,  103 

A.  O.    U.  W.   V.  Moore,    Ky., 

276,  299,  301 
Appeal  of  Sperry  116   Pa.  St. 

391,  72,76 

Armstrong  v.  Mutual  Life,  13 

Rep.  71,  374 

Arnet  v.  Milwaukee   Mutual, 

22  Wis.  516,  373 

Arthur  v.  Odd  Fellows,  29  Oh. 

St.  559,  211,  214,  232 

Ash   V.  Guie,   97  Pa.   St.  493. 

97,101 
Aspinwall  v.  Sacchi,  57   N.  Y. 

331,  99 

Attorney  General  v.  Moore,  19 

N.  J.  Eq.503,  160 

Austin  V.  Searing,  16  N.  Y.  112 

364,  368 
Aveson  v.  Lord  Kinnard,  6  East, 

188  377 


B. 


Bachman  v.  Arbeiter  Bund,  64 

How.  Pr.  442,  51,  84,  413 

Bagg's  Case,  11  Coke  99,  29,  39 

Bailey  v.  Lewis,  3  Day  450,  148,  159 
Bailey  v.  ]\Iutual  Ben.  Ass'n,  71 

Iowa  689,  335,  390 

Baker  v.  Citizens'  Mutual,  51 
Mich.  243,  295,  312 


Baker  v.  Fales,   16   Ma.ss.  488 
Baker  v.  Ins.  Co.,  43  N.  Y.  383 


157 


304 


Baker  v.  N.  Y.  Ben.  Ass'n,  N. 

Y.  345,  353,  392 

Baldwin  v.  Golden  Star,  47  N. 

J.  L.  Ill,  166(1. 


(vii) 


TABLE    OF    CASES. 


SECTION. 

Ball  V.  Granite  State,  N.  H. 

343,  401 
Ballon  V.  Gile,  50  Wis.  G14, 

201,  233 
Bangs  V.  Mcintosh,  23   Barb 

591.  285 

Banks  v.  Phelan,  4  Barb.  80, 

159 
Barbarro  v.  Occidental  Grove, 

4  Mo.  App.  439,  97,  163,  303 

Barber  v.  Ins.  Co.,  16  W.  Va. 

658,  371 

Barron  v.  Burnside,  121  U.  S. 
186,  369 

Barrows  v.  Mass.  Med.  Soc,  12 

Cush.  402,  42 

Barry  v.   Nuckolls,  21  Tenn. 

324.  104 

Bartlett  v.  Union  Mutual,  46 

Me.  500,  373 

Barton  v.  Provident  Mutual,  63 

N.  H.  535,  184,  228 

Baskin's  Appeal,  3  Pa.  St.  304, 

257 
Basye  v.  Adams,  81   Ky.  371, 

185,  191 
Bates  v.  Detroit    Mutual,    51 

Mich.  ^)81,  295 

Bates  V.   Mutual    Benefit,    47 

Mich  646,  284,  388,392 

Bauer  v.  Samson  Lodge,  102 

Ind.  262,  12,361,367,375 

Baxter  v.  Mutual  Ins.  Co.,  1  Al- 
len 394.  117 
Baxter  v.  Board  of  Trade,  83 

111.  146,  86 

Bear  v.  Bromley,  11  Eng.  L.  & 

Eq.  414,  •  138 

Beaumont  v.  Meredith,  2  Ves. 

&  Beames  180,  95,  133 

Becker  v.  Farmers'  Mutual,  48 

Mich.  610,  166 

Beneficial  Association,  38  Pa 

St.  299,  40 

Beneficial  Society  v.  White,  30 

N.  J.  Law  313,  375 

Bergman  v.  St.   Paul  Mutual, 

29  Minn.  375,  1 

Bergson  v.  Ins.  Co ,  38  Cal.  541, 

304 
Berlin  Ben.  Societ}'  v.  March, 

83  Pa.  St  166,  240 

Bersch  v.  Sinnissippi  Ins.  Co., 

82  Ind.  64.  279 

Bewley  v.  Equitable  Society, 

61  How.  Pr.  343,  '      389 


SECTION. 

Bickerton  v.  Jacques,  28  Hun. 

119,  264 

Bigelow  V.  Libby,    ll7  Mass. 

359,  353 

Bird  V.  St.  Mark's  Church,  62 

Iowa  567,  155,  156 

Birmingham  etal  v.  Gallagher, 

113  Mass.  190,  149 

Birnbaum  v.  Conductors'  Ass'n 

15  W.  N.  C.  518,  397 

Bish  v.  Hawkeye  Ins.    Co.,  69 

Iowa  184,  371 

Bishop    v.    Grand    Lodge,  43 

Hun.  473,  166a.,  271 

Bishop  V.  Young,   17  Wis.  46, 

199 
Black  &  White  Smiths  v.  Van- 
dyke, 3  Whart.  313,      48,  356,  413 
Blakely  v.  Bennecke,  59  Mo. 

193,  165 

Bloom  V.  Franklin  Life  etc.,  97 

Ind  478,  176 

Bloomington   Mutual  v.  Blue, 

120  111.  121,  7, 178,  191 

Bhimenthal    v.    Chamber    of 

Commerce,  7   C.    L.  B.  327, 

42,  67,  75,  83 
Bolt  V.  Keyhoe,  30    Hun.  619, 

200a. 
Bolton   V.  Bolton,  73  Me.  299. 

163,  164,  167,  239 
Borgraefe  v.  Supreme  Lodse. 

22  Mo.  App.  137,  316,  348 

Bostwick    V.    Fire    Dep't,    49 

Mich.  513,  51 

Bouten   v.   American  Mutual, 

25  Conn.  542,  248,  338,  387 

Bowden    v.  McLeod,   1    Edw. 

Ch.  588,  158,  161 

Bown  V.  Catholic   Mutual,  33 

Hun.  263,  210,  218 

Boyles  v.  McCoy,  37  Tenn.  692, 

98 
Boynton  v.  Middlesex  Mutual, 

4  Met.  312,  373 

Bradfield  v.  Union  Mutual,  9 

W.  N.  C.  43G,  165,166 

Bradley  v.  Mut.  Ben.  45  N.  Y. 

432, ■  176 

Bradwell  v.  Ins.  Co  ,  75  N.  C. 

o  328 

Bray  v.  Farwell,  81  N.  Y.  600,        1 
Brings  V.  Earl,  139  Mass.  473, 

191 
Bromley  v.  Williams,  33  Beav. 
177,  92 


TABLE    OF    CASES. 


IX 


SECTION. 

Brooke  v.  Shacklett,  13  Gratt. 

3U1,  157 

Brown  v.  Dale,  25  Eng.  Kep. 

(Moak)  776,  151 

Brown  v.  GirfEen,  U  W.  N.  C. 

358,  149 

Brown  v.  Mansus,  N.  H.  193 

Brunnenmeyer  v.  Buhre,  32  111. 

183,  161 

Bucklee  v.  U.   S.  Ins.  Co.  18 

Barb.  541,  339 

Buckley  v.  Columbia  Ins.  Co., 

83  Pa.  St.  298,  287 

Buffum    V.  Fayette   :Mutual,  3 

Allen  360,  301 


SECTION. 

Burbank  v.  Boston  Police,  etc., 

144  Mass.  434,  32,  343 

Burland  v.  N.  AV.  Mutual,  47 

Mich.  427,  388,  405 

Burls  V.  Smith.  7  Bing.  705.  102 

Burton  v.  Eyden,  8  Q.  B.  295, 

173 
Burton  v.  St.  George   Society, 

28  Mich.  261,  53,  72,  74 

Bush  V.   Sherman,  80   III.  160 

149 
Butchers'  Beneficial  Ass'n,  35 

Pa.  St.  151,  40 

Byrne  v.  Casey,  Texas,        166a.  202 


Caldicott  V.  Griffith,  22  Eng.  L. 

&  Eq  527,  112 

Calkins  v.  Cheney,  92  111.  464, 

45 
Cammack   v.  Lewis,  15  Wall. 

643,  195 

Cammeyer  v  United  Society, 

2  Sand   Ch.  186,  33,  161 

Campbell  v.  International  Life, 

4  130SW.  298,  330 

Campbell  v.   N.  E.    Mut.,    98 

Mass.  381,  177 

Cannon  v.  Corn  Exchange,  27 

Grant's  Ch.  23.  70 

Carlen  v.    Drury,    1    Ves.    i!s: 

Beames  154,  80 

Carmichael  v.   N.  W.  Mutual, 

51  Mich.  494,  180 

Carraher  v.  Insurance  Co-,  N. 

Y.,  268 

Cartan  v.  Fr.  ]\Iathews  Soc  ,  3 

Daly  20,  26,  27,  356 

Cartwriuht  v.  Vandry,  5  Ves. 

534,    ^  239 

Castnerv.  Farmers'  Mutual,  50 

Mich.  273,  67,  281.  285,  289 

Catholic   Ben.  Ass'n  v.  Priest, 

46  Mich.  429,  208,  210 

Catlaud  v.  Hoyt,  78  :\Ie.  355,        267 
Catoirv.  American  Life,  33  N 

J.  L.  487,  34S 

Central  City  v.  Walker,  66  N. 

Y.  424,  102 

Chamberlain    v.   Lincoln.  129 

Mass.  70,  130,  360 

Chandler  v.  St.  Paul  Ins.  Co. 

21  Minn.  85,  371 


Chapin  v.  Fellowes,  36  Conn. 

132,  201 

Chase  v.  Cheney,  58   III.  509. 

64,  71,  72a.,  75,  77,  156 
Cheeny  V.  Clark.  3  Vt.  431,  112 

Chicago  Life  v.  Warner,  80  111. 

411, 
Child  V.  Christian  Society,  144 

IMass.  473, 
Chubb  V.  Upton,  95  U.  S.  665, 


Church  V.  Seibert,  3  Pa.    St. 

282, 
Church  V.  Witherell,  3  Paige 

296, 
Churchill  v.  Churchill,  2  Met. 

469, 
Cincinnati  Lodge  v.  Littleburv, 

Ohio, 
Clancey  v.  Salt  :\If'g  Co.,  62 

Barb.  395, 
Clevenger   v    ]\Iutual    Life,  2 

Dak.  114, 
Coates  V.  flavor,  etc.,  7  Cowen 

584. 
Cockburn     v.    Thompson,     16 

Vesey  321, 
Cockerell  v.  Ancompte,40En<i;. 

L.  &  Eq.  284, 
Cohen  v.  N.  Y.  Mutual,  50  N. 

Y.  610,  389 

Colm  V.  Borst,  36  Hun.  562.  104 

Coleman   v.  Coleman,  78  Ind. 

344,  99 

Coleman  v.  Knights  of  Honor, 

18    .Mo.  App.  'i89 

26,194,207,221,223 


345 

101 

99 

158 

158 

245rt. 

365 

5 

13 

26 

95 

101 


TABLE    OF    CASES. 


SECTION. 

Coles  V.  Iowa  Mutual,  18  Iowa 

425,  12 

Collier  V.  Benevolent   Ass'n,  1 

Cin.  L.  Bull.  18,  145 

Collins  V.  Hoxie,  9  Paige  (!h, 

81,  239 

Commercial  Ins.  Co.  v.  Spauk- 

enble.  52  III.  o-i.  339 

Commercial  League  v.  People, 

90  111.  166,  3 

Commonwealth  v.  Cain,  5  S.  & 

R.  509,  23 

Commonwealth  v.  German  So- 
ciety, 15  Pa.  St.  251,     48,  52, 53,  72 
Commonwealth    v.    Green,    4 

Whart  537.  125 

Commonwealth    v.  Guardians 

of    Poor,    6   Sar.  &    R.  469, 

48,  53,  75 
Commonwealth    v.    Hunt,     4 

Met.  Ill,  20 

Commonwealth  v.  Maj'or,  etc., 

5  Watts.  152,  16,  49,  124 

Commonwealth    v.    Pa     Ben 

Inst.,  2  S.  &.  R.  141,  48,  67,  68, 310 
Commonwealth      v.      Philan- 
thropic Soc,  5  Binney  486,  53 
Commonwealth  v.  St.  Patrick's 

Soc,  2  Binney  441.  27,  43,  48 

Commonwealth  v.  Wetherbee, 

105  Mass.  149,  2,  163 

Commonwealth    v.  Woelper,  3 

S.  &.  K.  28.  90,  120,  126 

Commonwealth  v.  Worchester, 

3  Pickering  461,  15 

Conn.  Mut.  v.  Pyle,  Ohio,  171 

Conn.  M.  L.,  etc.,  v.  Schaffer, 

94  U.  S.  457,  177,  374 

Continental  Life  v.  Palmer,  42 

Conn.  60,  245a.,  260,  265 


SECTION. 

Continental  Life  v.  Kogers,  119 

111.  474,  374 

Co-operative     Association      v. 

McConnico,  53  Miss.  233,  382 

Corrigan   v.    Father    Mathew 

Ben.  Soc,  65  Barb.  357,  71 

County  of  St.  Clair  v.  People, 

85  111.  396,  388 

Covenant    Mutual  v.  Conwaj', 

10  111.  App.  348,  274 

(Covenant  Mutual  v.  Hoffman, 

110  111.  603, 

292.  40lrt.  261,  258,  261,  244, 
Covenant  Mutual  v.  Sears,  114 

111  108,  236,389,391 
Covenant  Mutual  v.  Spies,  114 

111.  463.  13,  284.  305,  378,  379 

Coyle  V.  Fr.  Mathew   Soc,  17 

N.  Y.  W.  Dig.  17,  18 

Coyle  V.  Ky.   Grangers,    Ky.. 

284,  295 
Cragin  v.  Cragin,  66   ^le.  517, 

265 
Crawford   ]\lutual  v.  Cochran, 

88  Pa.  St.  230,  346 

Crockett  v.  Crockett,  2  Philips 

553,  257,  265 

Cromer  v.  Pinkney,  3    Paige 

Ch.  461,  239 

Grossman  V.  Mass.  Mutual,  143 

Mass.  435,  133,  282,  326,  328 

Cullen  V.  Duke  of  Queensbury, 

1  Brown's  Ch.  lOl,  95,  106 

Cummings  v.  Webster,  43  Me. 

192,  13 

Curd  v.  Wallace,  7   Dana  190, 

158 
Curtis  V.   Mutual    Benefit,  48 

Conn.  89,  392,  394,  401 


D. 


Daniel  v.  Pratt,  143  Mass.  216, 

185,  210 
Davidson  v.  Young,  38  111.  152, 

342 
Davidson  v.  Supreme  Lodge, 

22  Mo.  App.  263,  375 

Dawkins  v.  Antrobus,   17  Ch. 
'     Div.  615,  55,  57,  62 

Dawkins  v.  Antrobus,  44  L.  T. 

R.  557,  61,  62,  64 

Day  V.  Case,  43  Hun.  179,  240 

Day  V.  Conn.    Gen.  Life,    45 
Conn.  4':<0,  304 


Deaderick     v.     Lampson,     11 

Heisk  523,  157 

Deady  v.  Bank    Clerks'  Ass'n, 

49  N.  Y.  Sup'r  Ct.  246,      202,  216 
Dean  v.  Bennett,  9  Eq.  625,  70 

Deginther's  Appeal,  83  Pa.  St. 

337,  260 

De  Jonge  v.  Goldsmith,  86  N. 

Y.  614,  193 

Delacy  v.  Neuse  River  Co.,  11 

N.  C.  274,  65 

Den  V.  Bolton,  12  N.  J.  L.  206. 

157 


TABLE    OF    CASES. 


Dennis  v.  Benefit  Association, 

47  Hun.  338,  323,  329 

Dennis  v.  Kennedy,  18  Barb. 

517,  92 

Derrick  v.  Lamar   Ins.  Co.,  74 

111.  404,  371 

Detroit    Bund    v.  Verein,    44 

Mich.  313,  5 

Devoss  V.  Gray,  23  Oh,  St.  159, 


102 


ol 


Dickenson    v.     Chamber 

Commerce,  29  Wis.  45,  41,  42 

Diehl  V.  Adams   (Jounty  Mu- 
tual, 58  Pa.  St.  443,  90,  340 

Dietrich  v.  Relief  Association, 
45  Wis.  79.  8,  163,  191,  201 

Dilleber  v.  Home  Life,  69  N. 
Y. 256,  378 

Dilligent  Fire  Co.  v.  Common- 
wealth. 75  Pa.  St.  291,  23,  28 

District  Grand  Lodge  v.  Cohn, 
30  111.  App.  335,  14,  47,  71,  307,335 

Dodge  V.  Freedmans'  Co.,  93  U. 
S.  379,  377 

Dolan  V.  Good  Samaritan,  128 
Mass.  437,  356,  367,  381 


SECTION 

Doriu    V    Dorin,    Eng.    &    Ir. 

App.  Cas.  568, 
Downing   v.  Mann,    3    E.    D. 

Smith  36, 
Downing  v.  Rugar,  31  Wend. 

178, 
Downing  v.  St.  Columba's  Soc 

10  Daly  262,  67,  68 

Downs  V.  Hammond,  47  Ind. 

131, 
Doubleday  v.  Muskett,  7  Bing. 

110, 
Dovle  V.  Benevolent    Soc,    3 

Hun.  361, 
Dublin  Case,  38  N.  H.  459, 
Duke  V  Fuller,  9  N.  H.  536, 
Duncan  v.  Jones,  32  Hun  13, 
Durhans  v.  Corey,    17   Mich. 

383,  67,  285 

Durian  v.   Central    Verein,  7 

Daly  168,  163,  166a.,  201,  302 

Dutton  V.  Willner,  53  N.  Y. 

313,  193 

Duvall  V.  Goodson,  79  Ky.  324, 

311,313,  345rt.,  361 


339 
106 
103 


353 

105 

30 
157 
144 

111 


Earl's  Case,  Carthew  173,  43 

Earnshaw  v.  Sun  Mutual,  'Sid. 

370,  392,  394,  401 
Eastman  v.  Provident,  etc.,  62 

N  H.,  201,  272 

Eddington  v.  3Iutual  Life,  67 

N.  Y.  185,  377 

Eggleston   v.   Centennial  Mu- 
tual, 19  Fed  Rep.  301,  391 
Eisemau  v.  Judah,                         313 
Elkhart  ^Mutual  v.  Houghton, 

98  Ind.  149.     167, 171, 177.367,  374 
Elkhart  ^lutual  v.  Houghton, 

103  Ind.  286,         177, 178,  394,  401 
Elliott  V.   Whedber,  94  N.  C. 

115,  270 

Ellis  V.  Council  Bluffs  Ins.  Co., 

04  Iowa  507,  370 

Ellison  V.  Reynold.s,  3  J.  &  W. 

503,  131,  138,  300 

Elsey    V.    Odd     Fellows.    143 

Mass.  334,  186,  336,  253,  258 

Embree  v.  Schideler,   30   Ind. 

423,  353 

Endie  v.  Slemmons.  26  N.  Y. 

9,  260 


Endowment  Ass'n.  v.  State,  35 

Kan.  253, 
Endowment  Ass'n.  v.  Wood,  4 

]Mackey  19,  261 

Epstein  v.  Mutual  Aid,  28  La. 

Ann.  938'  291,  393 

Equitable  v.  McLennon,  6  Ins. 

L.  J.  134. 
Equitable  Society  v.  Peterson, 

41  Ga.  338, 
Erd    V.   Bavarian  Association, 

Mich.,  34  N.  W.  Rep.  555, 
Erdmann   v.  ^lutual,  etc.,    44 

Wis.  37(5,      163,  164,  303.  335,  375 
Evangelical  Ass'n.  Appeal,  35 

Pa.  St.  310, 
Evans  v.  Phil.  Club,  50  Pa.  St. 

107, 
Ewing    V.  3Iedlock,   5  Porter 

(Ala.)  83, 

Excelsior  Mutual  v.  Riddle, 

91  Ind.  81. 
Ex  parte  Paine.  1  Hill  665, 
Expressmans'    Aid   Society  v. 

Lewis,  9  Mo.  App.  412,      201,  !i:63 


164 


33 

181 


44 


159 

43 

94 

388 
29 


Xll 


TABLE    OF    CASES. 


Fairchild  v.  AUeu,  11  R.  I.  439, 


177 


Fairchild  v.  N.  E.  Mutual,  51 

Vt.  624,  177,  293,  400,  401 

Farmer  v.  State,  Texas,  163 

Farmers'  Mutual  v.  Bowen,  40 

Mich.  147,  336 

Farmers,  Mutual  v.  Chase,  56 

N.  H.  341,  277 

Farnsworth  v.  Storrs,  5  Cush 

412,  64,  109 

Farrer  v.  Close,  4  Q.  B.  602,  20 

Farrie  v.  Supreme  Council,  47 

Hun.  639,  284,  302 

Fawcett  v.  Charles,  13  Wend 
474,  109 

Fayette    Mutual  v.    Fuller,  8 

Allen  27,  278 

Felix  V.  Grand  Lodge,  31  Kan. 

81,  245,265 

Fells  V.  Read,  3  Vesey  Jr.   70, 

152 
Fenn  v.  Lewis,  81  Mo.  259,  233 

Ferrariav.  Vasconcellos,  31  111. 

25,  155,  157,  161 

Ferris  v.  Thaw,  72    Mo.    446, 

101,  102 
Fischer  v.  Raab,  57   How.  Pr. 

87.  123, 141 

Fisher  v.  Andrews,    37    Hun, 

176,  354 

Fisher  v.  Board  of    Trade,  80 

111.  85,  86 

Fisher  v.  Keane,  11  Chan.  Div. 

353,  62,  63 

Fisk  V.  Equitable  Aid,  Pa.  204 

Fitch  V.  Ins.  Co.,  59  N.  Y.  573, 

175 
Fitch  V.  Remer,  1  Biss.  337,  168 
Fitzpatrick    v.    Mutual,    etc., 

Soc,  25  La.  Ann.  443,  297 

Flagg  V.  Swift,  25  Hun  623,         115 
Flemyng  v.  Hector,  2  Mees.  & 
W.  172,  ^  100 


SECTION. 

Folmer's  Appeal,  87  Pa.  St.  133, 

180 
Foster  v.  Gile,  50  Wis.  603,  201 

Foster  v.Moulton,  35  Minn. 458       99 
Foster  v.  Pray,  Minn.  29  N.  W. 

Rep.  155,  2 

Fowler  v.    Metropolitan    Ins. 

Co  ,  41  Hun.  357,  332 

Franklin  v.  Commonwealth,  10 

Barr.  359,  27,  40 

Franklin  Ins.  Co.  v.  Humphrey, 

65  Ind. 549,  367,  375 

Franklin  Life  v.  Sefton,  53  Ind. 

380,  328,  348,  374 

Franklin  Life  v.  Wallace,  93 

Ind.  7,  172 

Fraternial  jVlutual    v.    Apple- 
gate,  7  Oh.  St.  292,  377 
Fredendall  v.  Taylor,  23  Wis. 

540,  106 

Fredenthal  v.  Taylor,  26  Wis. 

286,  105 

Freeman  v.  National   Soc,  42 

Hun.  252,  392,  396,  397,  399 

Fried  v.  Royal  Ins.  Co.,  50  N. 

Y.  243,  169 

Friezen  v.  AUemania  Ins.  Co., 

30  Fed.  Rep.  352,  371 

Fritz  V.  Muck,  62  How.  Pr.  70, 

63,  65,  67 
Fritz  V  St.  Stephen's  Soc,  62 

How.  Pr.  69,  308 

Frey  v.  Mutual  Ins.  Co  ,  43  U. 

C:  102,  285 

Frey  v.  Wellington  Mutual,  4 

Out.  293, 
Frost  V.  Saratoga,  5  Denis  516, 


298 
839 


Fugure  v.  IVIutual  Society,  46 

Vt.  362, 
Fuller  V.  B  &  O.  Relief  Ass'n. 

67  Md.  433, 
Fuller  V.  Trustees,  etc.,  6  Conn. 

532, 


19 


27 


G. 


Gable  v.  Miller,  10  Paige,  627,  161 

Gaff  V.  Greer,  88  Ind.  122,  158 
Gaige  v.  Grand  Lodge,  48  Hun. 

137,  322 
Gambs  v.  Covenant  Mutual,  50 

Mo.  44.  201 


Cans  V.  St  Paul  Mutual,  43  Wis. 

108,  339 

Gardner  V.  Freemantle,  19  W. 

R  256,  71,  78 

Gardner  v.  Heyer,  2  Paige  Ch. 

461,  239 


TABLE    OF    CASES. 


XIU 


SECTION. 

Garner  v.  Ins.  Co..  33  Alb.  L. 

J.  91  201 

Garretson  v.  Equitable  Mutual, 

Iowa,  285,  403 

Gauch  V.  Ins.  Co.,  88  ill.  251, 

251,253 
Gay  V.  Farmer's    Mutual,   51 

Mich,  245,  29,  36 

Geiger  v.  McLin,  78  Ky,  232,     200« 
Gellatly  V.  Mutual  Benefit, e.c  , 

27  Minn.  215,  284 

Genest  v.  L'Union,  141  Mass. 

417,  383 

Gentry  v.  Supreme  Lodge,  23 

Fed.  Rep  718.  184,  201 

Georgia  ^Masonic  v.  Gibson,  52 

Ga  640,  166,  337,  376 

German  Congregation  v.  Pres- 

ler,  17  La  Ann,  127,  161 

Gibson  v.  Armstrong,  7  B  Mon. 

481,  157 

Gibson  v.  Ky.  Grangers'    Soc. 

Ky.,  232,  334 

Giddings  v.  N.  W.  Mutual,  102 

U.  S.  108,  168,  169 

Gilbert  V.  Crystal  Lodge,  Ga.,     Ill 
Given  v    Wisconsin  Odd  Fel- 
lows, Wis.,  263 
Glanz  V.  Gloeckler,  104  111.  573,    260 
Goetzmann  v.  Conn.'  Mut.,  5  T. 

&  C.  572,  176 

Golden  Rule  v.  People,  118  111. 

492,  3,  21 

Goldschmidt  v.  Mutual   Life, 

102  N.  Y.  486,  175 

Goodman  v.  Jedidjah  Lodge,  65 

Md.  236,  153 

Goodman  v.  Jedidjah  Lodge, 

67  Md.  117  132,  145,  153 

Gorman  v.  Russell,  14  Cal.  531, 

138  ,139 


SECTION. 

Gorman  v.  Russell,  18  Cal.  688,     140 
Gosling  V.  Caldwell,  69  Tenn. 

454,  249 

Governors,    etc.    v.   American 

Art  Union,  7  N.  Y.  2-.i8,       21,  163 
Gould   V.  Emerson,  99    Mass. 

154,  265 

Grand  Lodge  v.  Child,  Mich.,     193 
Grand  Lodge   v.  Waddill,   36 

Ala.  313,  10 

Grattan  v.  Ins.  Co.,  80  N.  Y. 

281,  378 

Gray  v.  Christian  Society,  137   . 

Mass,  339,  31,  67 

Gray  V.  National  Ben.  Ill  Ind. 

531,  334,  335 

Gray  v.  Pearson,  L.  R.  5  C.  P. 

568,  103 

Gray  v.  Portland  Bank,  3  Mass. 

385,  83 

Great  Falls   Insurance  Co.   v. 

Henry,  45  N.  H.  393.  31 

Greely  v.  Iowa  St.  Ins.  Co.,  50 

Iowa  86,  391,  293 

Green  v.  Cady,  9  Wend.  414,     117 
Green  v.  Society,  1  S.  &  R.  354, 

54,73 
Greeno  v.  Greeno,  23  Hun.  478, 

201,  311,312 
Gregg  V.  Mass.  Med.  Soc,  111 

M'liss.  185,  43,  85. 

Griffin  v.  West  Ass'n.,  20  Neb. 

620,  176 

Grit  V.  National-  Ins    Co,  25 

Barb.  189,  304 

Grosvenor   v.  United  Societj% 

118  Mass.  78,  35,64.  152 

Guardian  Mutual  v.  Hogan,  80 

111.  47,  175,  374 

Gundlach  v.  Gerraania  Ass'n. 

49  How.  Pr.  190,    8, 19,  21,  166, 202 


H. 


Habicht  v.  Pemberton,  4  Sand. 

Repts,657,  92,  93 

Haddenv.  Chorn,8  B.  Mon.  70, 

157, 158 
Hagermanv.  Ohio  Association, 

25  Oh.  St.  186,  6 

Hale  V.  Everett,  53  N.  H.  9, 

155,  158,  160 
Hale  V.  Ins.  Co.,  6  (4ray,  169,  12 
Hale  V.  Mechanic's  Mutual,  6 

Gray,  169,  117 


Hall    V.  Peoples'    Mutual,    6 

Gray,  185,  369,  373 

Hall  V.  Supreme    Lodge,    24 

Fed.  Rep.  450,  79,  384,  305,  313 
Hamilton  v.   Pitcher,  53  Mo. 

334,  265 

Hankinson  v.  Paige,  31   Fed. 

Rep.  189,  292.  397,  405 

Hanley  v.  Life  Ass'n,  69  Mo. 

380,  328 


TABLE  OF  CASKS. 


SECTION-. 

Hanover  Ins.  C'o.  v.  Connor,  20 
■«I11  App.  397,  199 

Happy  V.  Morton,  33  111.  COS, 

155,  159 
Hardie  v.  Ins.  Co.,  26  La  Ann. 

242,  168 

Hardin  v.  Baptist  Church,  51 

Mich.  137,  45,  46 

Hare  v.  Lloyd,  1  T.  &  R.  693,  239 
Harl  V.  Mutual  Ins.  Co.,  Iowa.  388 
Harman  v.  Lewis,  24  Fed.  Rep. 

97,  530,  197 

Harmon  v.  Dreher,  1  Speers' 

Eq.  87.  158 

Harper,  Adm'r  v.  Phoonix,  19 

Mo.  506,  176 

Harper  v.  Strauss,  14  B.  Mon. 

48,  158 

Harriman  v.  Baptist  C'hurch, 

63  Ga  186,  10 

Harrington  v.    Workingmen's 

Society,  70  Ga.  340. 

25,  26,  79,  130,  360,  381 
Harris  v.  Equitable,   etc.  So- 
ciety, 64  N.  y.  196,  341 
Harrison  v.  Hoyle,  24  Oh.  St. 

254,  158 

Haskins  v.  Kj.  Grangers,  etc., 

Ky.,  285, 298 

Hassler  v.  Phil.  jVIusical  Ass'n, 

37  Lea;.  Int    434,  63 

Hawkins  v.  Rutt,  1  Peake  R. 

67,  300 

Hawkshaw  v.  Supreme  Lodire, 

29  Fed.  Rep.  770,  89,  301,  329 

Hay  V.  Star  Ins.  Co.,  77  N.  Y. 

235,  371 

Head  v.  Ins  Co  ,  2  Branch,  127,  2 
Heath  v.  Coslin,  80  Mo.  310,  105 
Hellenberg  v.  I.  O.  B.  B.  94  N. 

Y.  580,  ''  201,  210,  211,  224 

Hendrickson  v.  Decow,  1  N.  J. 

Eq.  577,  155 

Henry  v.  Deitrich,  84  Pa.  St. 

286,  160 

Henrv  v.  Grand  Lodge,  15  111. 

App.  151,  375 

Hess  V.  Werts,  4  S.  &  R.  356,  107 
Heywood  "V.  Buffalo,  4  Kern, 

534,  85 

Hibernia,  etc.  Co.  v.  Harrison, 

93  Pa.  St.  264,  278 


SECTION. 

nicks  V.  Perry,  140  Mass.  580,  206 
Higtjins  V.   Hopkins,  3  Exch. 

IGi,  107 

Highland  v.  Highland,  109  111. 
.  360,         183,  184,  192,  217,  219,  220 
Hill  V.  Crook,  6  H.  L:  Cas.  268,    239 
Hill  V.  Hart-Davis,  47  L.  T.  R. 

N.  S.  82,  96 

Hinkley  v.  Blethen,  78  Me.  221,  151 
Hitter  v,  St.  Aloysius  Soc  Ky.,  174 
Hodgdon  v.  Ins.  Co.  97  Mass. 

144,  337 

Hodge's  Appeal,   8  W.   N.  C. 

209,  248,  258 

Hoffman    v.   John    Hancock 

Mutual,  92  U.  S.  161,  301 

Hoffman  v.  Supreme  Council. 

35  Fed  Rep.  -52,  321,  343 

Hoffins  V.   Supreme   Council, 

Cal.  174 

Holabird  v  Ins.  Co.,  2  Dill  166,  181 
Holland    v.  Taylor,    111    Ind. 

121,  223 

Hollister   v.  Quincy  Ins.    Co 

118  Mass.  478,  287,  333 

Holmes  v.  Higgins,  1  Barn  & 

Cres.  74,  112 

Home  Ins.  Co.  v.  Myer,  93  111. 

271,  '  371 

Home   Ins.   Co;  v.   Morse,  20 

Wall.  445,  369 

Hope    Mutual   v.     Weed,    28 

Conn.  51,  353 

Howell  V.  Knickerbocker  Life, 

44  N.  Y.  276,  329,  332 

Howland    v.    Cuvkendall,    40 
Barb.  320,  '  353 

Hughes  V.  Hughes,  12  B.  Mon. 

121,  245fl. 

Hull  v.  Hull,  62  How.  Pr.  100,  245a. 
Hurd   V.    Masonic    Mutual,   6 

Ins.  L.  J.  792,  377 

Hussey  v.  Gallagher,  61  Ga  86, 

123,  134 
Hutchings  v.   Miner,  46  N.  Y. 

456  201 

Hutson  v.  Merrifield,  51  Ind. 

24,  171,  260 

Hyatt  V.  Waite,  37  Barb.  29,  352 
Hyde  v.  Woods,  94  U.  S.  523,  21 
Hvgum  V.  .^Etna  Ins.   Co.  11 

"Iowa,  21,  172 


I. 


Illinois  Ins.  Co.  v.  Stanton,  57 
111.  354, 


328 


Illinois  Masons'  v.  Baldwin,  86 
111.  479,  41,  163,  317,  326,  348 


TABLE    OF    CASES. 


SECTION. 

Independent  Order  v.   Paine, 

111.,  6 

Inderwick  v.  Snell,  2  Mac.  & 

G.  216,  60 

Ingram  v.  Supreme   Council, 

47  Hun.  637,  323,  329 

Innes  v.  Wylie,  1  Car  &  Kir, 

257,  62,  83 

In  re  Harris,  7  Exch.  344,  240 

In  re  lus.  Co.,  10  R.  I.  42,  353 

In  re  La  Solidarite,  etc.  Ass'n, 

68  Cal.  392,  127, 173 

In  re   Mutual  Aid   Ass'n,   15 

Phil.Repts,  625,  5 

In  re  Newell  Smith,  10  Wend 

447,  54,  73 


SECTION. 

In  re  Protection  Life,  9  Bissell 

188,  276,  351,  354,  389 

In  re  Rev.  David  Mulholland 

Ben.  Soc,  10  Phil.  Repts.  19, 
In  re  St.  Clement's  Church,  28 

Leg.  Int.  172, 
In  re  St.  James  Club,  13  En<,^ 

L.  ^:  Eq.  589,  100,  151 

Insurance    Co.   v.   Connor,  17 

Pa.  St.  136, 
Ins.  Co  V.  Stockbower,  26  Pa. 

St.  198, 
Ireland  v.  Ireland,  42  Hun.  212, 
Irish  Catholic  Soc.  v.  O'Shan- 

ghnessey,  76  Ind.  191,  380 


40 
63 


21 

339 
222 


Jackman  v.  Nelson,  Mass  ,    242, 259 
Jamieson  v.  K.  T.  Ass'n,  Ohio, 

250,  254 
Johnson  v.  Ins.  Co.,  92  111.  91,  371 
Johnson  v.  Southern  Mutual, 

79  Ky.  404,  317 

Johnson  v.  Epps,  110  111.  551. 

177,  201,  203,  204 
Joliffe  V.  Madison  Mutual,  39 

Wis.  Ill,  335 


Jones  V.  Foote,  137  Mas.^.  543,     24 
Jones  V.  National  Mutual,  Ky., 

117,  326,  414 
Jones  V.   Sisson,  6   Gray  288, 

67, 285 
Jubber  v.  Jubber,  9  Sim.  503,     242 
Juker  v.   Commomvealth,    20 
Pa.  St.  484,  120 


K. 


Kaiser  v.  Kaiser,  13  Daly  522, 

208,  256 
Kansas  Protective,  etc.  v.  Whitt, 

36  Kan.  760, 

273,  378,  394,  396,  401,  401a. 
Karcher  v.  Supreme  Lodge,  137 

Mass.  368,  79,  295 

Kearv  v.  Mutual   Reserve,  30 

Fed.  Rep.  359,  374 

Kelsey  v.   U.  S.  Ins.   Co.,  35 

Conn.  225,  377 

Keels  V.  Mutual  Ass'n,  29  Fed. 

Rep.  198,  175 

Kehlenbeck  v.   Norddeutcher 

Bund,  10  Daly  447,  12,25 

Kelley  v.  A.  O.  of  IL,  9  Daly 

289  173 

Kelsall  v.  Tyler,  34  Eng.  L.  & 

E.  588,  362 

Kent  V.   Mining  Co.,  78  N.  Y. 

159,  19 

Ky.   Grangers'  Soc.  v.  Howe, 

Ky.,  235 


Kv-  Grangers'  Soc.  v.  McGregor, 

Ky.,  232, 334 

Ky.  Lodge  v.  White,  Ky.,  356.  363 
Kentucky   Masonic  v.  Aliller, 

13  Busii  489,  23,  201 

Kepler  v.  Supreme  Lodge,  45 

Hun.  274,  210,  229 

Kernan  v.  Howard,  23  Wis.  108,  201 
Kerr  V.Trego,  11  Wrisiht  292,  63 
Kershaw  v.  Bailev,  1  E.xch,  743,  109 
Keyser  v.  Stansifer.  6  Oh.  368,  159 
Killips  v.  Putnam  Ins.  Co.,  28 

Wis.  472,  371 

Kinir  v.  Chalke,  1  Ld.  Raym, 

226,  '  41 

King  v.  Faversham,  8  T.  R.  350, 

52,  69 
King  V.  Mayor,2  Ld.  Raym.  1566  41 
King  V.  Mavor,  5  Mod.  257,  52,67 
King  V.  Steward,  8  T.  R.  356,  15 
Kington  v.  Kington,   11  M.  & 

W.  233,  ^  300 


XVI 


TABLE    OF   CASES 


SECnON. 

Kinskern  v.  Luthpran  Churches, 

1  Sand.  Ch.  430  159 

Kirkpatrick  v.  Eagle  Lodge,  26 

Kan.  3S4,  110 

Kistler  v.  Indianapolis,  etc.  Co., 

88  Ind  460  367 

Klein  v.  Ins.  Co.,  104  U.  S.  88,  32!) 
Kline  v.  National  Benefit,  111 

Ind.  462,  304 

Knickerbocker  Life  v.  Weitz, 

90  Mass.  157,  260 

Knights  V.  Grace,  60  Texas  569,  169a 


SECTION. 

Knights  of  Honor  v.  Nairn  60 

Mich.  44,  224,  226 

Knights  of    Pythias'    Case,  3 

Brewster  452  58 

Knehler  v.  Brown,  2  Daly  78,  150 
K(£hler  v.  Centennial  Mutual, 

66  Iowa  325,  243 

Koelges  v.  Gda  Life.  2  Lansing 

480.  248 

Kohen  v.  Mutual  Union,  28  Fed. 

Rep.  TO.'i,  169a. 

Kurz  V.  Eggert,  9  W.  N.  C  126,     1 15 


L. 


Ladies  Ben.  Soc  v.  Ben.  Society, 

3  Tenn.  Ch.  100,  152 

Labouchere    v.    Warnclifl,   13 

Chan.  Div.  347,  63,  70 

Lafond  v.  Deems,  81  N.  Y.  507. 

79,  130,  140,  141,  360 
Lambert  v.  Addison,  46  L.  T. 

R.  20,  60 

Lamont  v.   Grand  Lodge,    31 

Fed  Rep.  177,  178,  201 

Lampierre  v.  L'Union,  etc.,  21 

L.  Can.  Jurist  332,  309 

Lamphere  v.  United  Workmen, 

47  Mich.  429,  21,  72,  279 

Laudman  v.  Entwistle,  7  Exch. 

632,  107 

Langdon  v.  Union  Mutual,  14 

Fed.  Rep.  272,  177,  374 

Laudenschlager  v.  N.  W.  Endw. 

Ass'n,  Minn.  375 

Lawyer  v.  Chipperly,  7  Paige 

281,  158 

Lazensky  v.  Supreme  Lodge, 

31  Fed.  Rep.  592, 

89,  312,  376,  377,  378 
Leech  v.  Harris,  2  Brews.  571, 

42,  54,  55,  63 
Legion  of  Honor  v.  Perry,  140 

Mass.  580,  23 

Lehman  v.  I.  O.  B.  B.,  39  Hun. 

658,  325 

Lemix  v.  Harmony  Settlement, 

3  Wall  Jr.  87,  152 

Lemon  v.  Phoenix   Ins.  Co.,  38 

Conn.  294,  177 

Leonard  v.  American  Ins.  Co., 

97  Ind.  299,  220 

Leonard  v.  Lebanon  Mutual,  3 

W.  N.  Cases  527,         340,  346,  348 


Lewis  V.    Phoenix   Mutual,  44 

Conn.  72,  327,  328 

Lewis  V.  Tilton,  64  Iowa  220, 

101,  105 
Lewis  V.  Watson,  4  Bush  228,  157 
Life   Ass'n  v.   Hagler,  23  111. 

App.  457,  ^        392,  394,  395 

Little  V.    Phoenix  Ins.  Co.,  123 

Mass.  380,  371 

Livingston  v.   Lynch,  4  John. 

Ch.  573,  146 

Livingstone  v.  Trinity  Church, 

16  Vroom  230,  45 

Lockwood  V.  Bishop,  51  How. 

Pr.  221,  243 

Long  Pond  Mutual  v.  Hough- 

ton,6  Gray  77,  "  4C6 

Loring    v.   Loring,   100   Mass. 

340,  242 

Lothrop  V,  Greenfield  Ins.  Co., 

2  Allen  82,  285,  291 

Lovejoy  v.  Hartford   Ins.  Co., 

11  Fed.  Rep.  63.  199 

Loubat  V.  Leroy,  65  N.  Y..  138,      90 
Loubat  V.  Leroy,   15  Abb.  N. 

C.  1,  72a. 

Loubat  V.  Leroy,  40  Hun.  546, 

63,  65,  72a,  79 
Lucas  V.  Case,  9  Bush.  297,  10& 
Ludlam  v.  Higbee,  11  N.  J.  Eq. 

342,   .  150 

Lueders  v.   Hartford   Life,  12 

Fed.  Rep.  465,  394,  401 

Luthe  V.  Farmers'  Ins.  Co.,  55 

Wis.  543,  10 

Lvcoming   Ins.  Co.,  v.  Barrin- 

"uer,  73111.  230,  339 

Lyttelton  v.  Blackburn,  33  L. 

T.  R,  N.  S.  642,  60,  78 


TABLE    OF    CASES. 


XVll 


M. 


8KCTI0N. 

McAlees  v.  Supreme  Sitting, 

Pa.  St.,  360 

McCabe    v.  Fr.   Matthew   So- 

ciety,  24  Hun.  149,  17 

McCartee  v.  Chambers,  6  Wend. 

649,  106 

McCarthy's  Appeal,  17  W.  N. 

C.  182,  132,  151 

McClure  v.  Johnson,  56  Iowa 

620,  210 

MeCorkle  v.  Texas  Ass'n,  Texas, 

285,  332 
McDermott  v.  Life  Association, 

24  Mo.  App.  73, 

239,  243,  245,  261 
McDonald    v.   Ross-Lewin,  29 

Hun.  87,  40,  276,  316,  352 

McGinnisv.  Watson,  41  Pa.  St. 

9,  158 

McKey  v.  Ins.  Co.  28  Mo.  383,  190 
McLafferty  v.  Sweeney,  Pa.,  87 
McLean  v.  McLean,  6  Hump. 

452,  217 
3IcMahon  v.  Rauhr,  47  N.  Y. 

67,  113, 138 

Madeira  v.  Merchants,  etc.  Soc, 

16  Fed.  Rep.  749,  307,  317 

Magaw  V.  Field,  48  N.  Y.  668,  245 
Magee  v.  Clayton  Lodge,  5  Del. 

453,  356 
Magie  v.  German  Church,  13 

IM.J.  Eq.  77,  161 

Mallory  v.  Travelers'  Ins.  Co., 
47  N.  Y.  52,  175 

Manby  v.  Gresham  Life,  etc., 
29  Beav.  439,  60 

Mandego  v.  Life  Association, 
64  Iowa  134,  328,  392 

Maneely    v.  Knights    of    Bir- 
mingham, 115  Pa.  St.  305,  182 

Manson  v.  Grand    Lodge,    30 
Minn.  509,     171,  301,  323,  367,  375 

Marblehead  Ins.  Co.  v.  Under- 
wood, 3  Gray  210,  278 

Marck  v.  Supreme  Lodge,  29 
Fed.  Rep.  896,  82,  305 

Markey  v.  Ins.  Co..  103  Mass. 
92,  169 

Marsh  v.    Huron   College,  27 
Grant's  Ch.  605,  "  70 

Martin  v.  State  Ins.  Co.,  44  N. 
J.  L.  485,  371 

Martino  v.  Ins.  Co.,  47  N-  Y. 
•      Sup'r  Ct.  520,  13 

»  1 


BE  CTION. 

Martz  V.   Detroit  Ins.  Co.,  28 

Mich.  201,  199 

Marvin  v.   Universal  Life.  85 

N.  Y.  278,  349 

Md.   Mutual  V.  Clendenin,  47 

Md.  429,  211,  213 

Masonic   Mutual   v.  Beck,  77 

Ind.  203,  335,  339 

Masonic   Mutual  v.  Burkhart, 

110  Ind.  189,        201,  202,  206,  375 
Masonic  Ins.  Co.  v.  Miller,  1  3 

Bush.  489,  239 

Masonic  Mutual  v.  McAuley,  2 

Mackey  70,     188, 234.  258,  262, 389 
Masons'   Soc.  v.  Winthrop,  SO 

111.  537,  163 

Mass.    C.   O.    F.  V.   Callahan, 

Mass.,  189 

Massey  v.  Rochester  Mutual, 

102  N.  Y.  523,  17H 

Matoon  v.  Wentworth,  4  Cin. 

L.  Bull.  513,  92,  362 

Matt    V.   Roman   Catholic    So- 
ciety, 30  N.  W.  Rep.  799, 

7,  174,  334,  336 
Mayer  v.  Equitable  Reserve,  42 

Hun.  237,  350,  354,  398,  411 

Mayers  v.  Mutual  Ins.  Co.,  38 

Iowa  304,  328 

Medical  Society  v.  Weatherby 

75  Ala.  248,  49,89  ,123,311 

Meier  V.  Meier,  15  Mo.  App.  68,     193 
Mentz  V.  Armenia  Ins.  Co.,  79 

Pa.  St.  478,  3G7 

Methodist  Church  v.  Wood,  5 

Ohio  283  158 

Metropolitan    B.    B.    Club  v. 

Simmons,  17  W.  N.  C  153,     63,  63 
Meyer  v.  Knickerbocker  Life 

73NY.516,  305,306 

Miller  v.  Assurance  Ass'n,  42 

N.  J.  Eq.457,  ,  117,  167,  198 

Miller  v.  Georgia   Masonic,  57 

Ga.  221,  412,  392 

Miller  v.   Lebanon  Lodge,  88 

Ind.  286,  149 

]\Iiller  V.   Union   Central,  110 

111.  102.  340 

Mills  V.  Rebstock,  29  Minn.  380. 

174.  175,  376 
Miner    v.    Michigan    Mutual, 

Mich.,  ''  290 

Misselhorn    v.   Mut.   Reserve, 

30  Fed.  Rep.  545,  169,  169rt. 


XVlll 


TABLE    OF    CASES. 


12 
377 


365 


277 


Mitchell  V.  Grand  Lodge,  70 
Iowa,  360,  178, 184 

Mitchell  V.  Lycoming  Mutual, 
51  Pa.  St.  402, 

Mobile  Life  v.  Morris,  3  Lea 
101, 

Mohawk  Lodgev.Wentwortb, 

Ohio, 
Monmouth  Ins.  Co.  v.  Lowell, 

59  Me.  504, 
Morel  V.  La  Societe,  13  Low. 

Gan.  Jur.  1,  31,  41 

Morrison  v.  Odd  Fellows,  59 

Wis.  162,  13j2l,166,  202,  337 

Morton  v.  Bush,  5  Bush.  467,  150 
Mory  V.  Michael,  18  Md.  241,  213 
Movers  v.   Smedley,   6  Johns 

Ch.  28, 
Mullally  V.  Irish  Am    Soc,  6 

Pac.  Rep.  88, 
Munn  V.  Burgess,  70  111.  604, 
Murphy  v.  Bidwell,  52  Mich. 

487, 

Murray  v.  Buckley,  N.  Y.,  334^. 
Murray  v.  N.  Y.  Life,  96  N.  Y. 

614,  176 


85 

380 
149 

98 


Mutual  Aid  Society  v.Miller, 

107  Pa.  St.  162,  260 

Mutual  Ass'n  v.  Kayser,  14  W. 

N.  C.  86,  371 

Mutual  Benefit  v.  French,  30 

Oh.  St.  240,  307 

Mutual   Benefit    v.   Hoyt,    46 

Mich.  473,  7,  179 

Mutual  Benefit  v.  Ruse,  8  Ga. 

534,  328 

Mutual  Endowment  v.  Essen- 

der,  59  Md.  463,  295,  392 

Mutual   Ins.  Co.  v.   Gray  77, 

279,  280 
Mutual   Ins.    Co.  v.  Miller,  58 

Md.  463,  328 

Mutual    Ins.  Co.  v.   Paige,   1 

Hilton  430,  279 

Mutual  L  &  A.  Society  v.  Mil- 
ler, 23  111.  App.  34,  309 
Mutual  Protection  v.'  Laury, 

84  Pa.  St.  43,  347 

Mutual   Relief  Society  v.  Bil- 

lau,  3  Am.  L.  R.  546,         298,  344 


N. 


Nachtrieb  v.  Harmony  Settle- 
ment, 3  Wall.  Jr.  66, 
Nally    V.   Nally,  74    Ga.  669, 

National  Bank  v.  Ins.  Co.,  94 

U.  S.  673, 
National   Ben.  Ass'n  v.  Grau- 

man,  107  Ind.  288, 
National    Benefit  v.  Jackson, 

114  111.  534, 
National  Mutual  Ben.  v.  Jones, 

Ky., 
National  Mutual  v.  Gonser,  43 

Oh.  St.  1, 
National    Mutual    v.  Lupoid, 

101  Pa.  St.  Ill,  193,  197 

National  Mutual  v.  Merill,  Ky., 

288,  327,  329 
Neskern    v.    N.    W.    Endow. 

Ass'n,  30  Minn.  406,  173,  386, 400 
Newell  V.  Borden,  128  Mass.  31,  102 
Newling  v.  Francis,  3  T.  R.  189,  120 
Newman  v.  Covenant  Mutual, 

72  Iowa,  242,        390,  391,  394,  403 


152 
204 
172 
374 
304 
339 
179 


New  England  Ins.  Co.  v.  But- 
ler, 34  Me.  451,  21 

N.Y.  Life,  V.  Statham,  93  U.  S. 
25,  306 

NicoUs    V.    Rugg,  47   111.  47,     158 

Niven  v.  Spiekerman,  12  John- 
son 401,  112 

N.  Am.  Life  V.  Wilson,  111 
Mass.  542,  260 

North  Berwick  v.  N.  E.  Ins. 
Co.,  52  Me.  336,  339 

N.E.  Mutual  v.  Butler,  34  Me, 
451,  171 

N.  W.  Benevolent  v.  Hall,  118 
111.  169,  374 

N.  W.  Mutual  V.  Elliott,  5  Fed. 
Rep.  225,  168 

N.  W.  Mutual  v.  Hazelett,  105 
Ind.  212,  172 

Nute  V.  Hamilton  Mutual,  6 
Gray  174,  369, 372 


TABLE   OF   CASES. 


XIX 


O. 


SECTION. 

Gates  V.  Foresters,  4  Ont.  535,  324 
Obrien  v.   Home   Beneflt,   46 

Hun.  426,  401 

Och   V.  Homestead  Ins.   Co., 

Pa ,  294 

Odd  Fellows  v.   Hook,  5  Cin. 

Law  Bull.  327,  67 

O'Donaghue  v.  McGovern,  23 

Wend.  26,  109 

Olery  v.  Brown,  51  How.  Pr. 

92,  63,  70,  130 

Oliver  v.  Am.   Legion  of  H., 

Cal.,  167,  169 

Oliver  v.  Hopkins,  144  Mass. 

175,  130 


Olmstead  v.  Farmers'  Mutual, 
50  Mich.  200,        117,  285.  3l2,  345 

Olmstead  v.  Keys,  85  N.  Y.597, 

177,  195 

Olmstead  v.  Masonic  Mutual, 
37  Kan.  93 ,  210,  225 

Ormond  v.  Fidelity  Associa- 
tion, 96  N.  C.  158,  169«,  274 

Osceola  Tribe  v.  Rost,  15  Md. 
296,  49 

Osceola  Tribe  v.  Schmidt,  57 
Md.  98,  365 

Otto  V.  Tailors'  Union,  17  Pac. 
Rep.  217,  44,56,60,75,81 


P. 


Pacific  Mutual  V.  Guse,  49  Mo. 

332,  277, 283 

Palmer  v.  Horn,  84  N.  Y.  576,    245 
Palmetto  Lodge  v.  Hubbell,  24 

S  C.  457,  34 

Park  V.  Spaulding,  10  Hun.  128, 

108,  115 
Passenger  Conductors,'  etc.  v. 

Birnbaum,  116  Pa.  St.  565,  277 
Patrick  v.  Ins.  Co.,  4  Hun.  263,  175 
Payn  v.   Mutual   Relief,   etc., 

17  Abb.  N.  C.  53,  296 

Payne  v.  Snow,  13  Cush.  443,     104 
Pearce   v.   Piper,   17  Vesey  1, 

95,  136,  138 
Pellazzino  v.  St.  Joseph's  So- 
ciety, 16  Cin.  Law  Bull.  27,        18 
Pence  v.  Makepeace,  65   Ind. 

345,  201 

Pendleton    v.  Knickerbocker, 

etc.,  5  Fed.  Rep.  338,  273 

Pentield  v.  Skinner,  1 1  Vt.  296,     148 
Penn.  Mutual  v.  Wiler- 100  Ind. 

93.  277 

Peoples'  Ins.   Co.  v.  Allen,  10 

Gray  297,  279,  280,  408 

People    V.    Am.    Institute,  44 

How.  Pr   468,  74 

People  V.  Batchelor,  22  N.  Y, 

138,  123 

People  V.  Benevolent  Society, 
t   51  Mich.  67,  2, 13,  23,  44 

People  V.  Benevolent  Society, 

3  Hun.  361,  49,  65.  97 

Peoi)le  V.  Benevolent  Societv, 

24  How.  Pr.  316,    3,  23, 44," 65, 308 


People  V.  Benevolent  Society,  65 

Barb.  357,  52,  74 

People  V.   Board  of  Trade,  45 

111.  112,  43 

People  V.  Board  of  Trade,  80 

111.  134.  27, 48 

People  V.  Crossley,  69  111.  195.  120 
People  V.  Dulaney,  96.  111.  503,  388 
People  V.  Fr.  Mathew  Societ3^ 

65  Barb.  357,  128 

People  V.  Fire  Department,  31 

Mich.  458,  19 

People  V.  Fischer,  14  Wend.  9,  20 
People  V.  German  Church,  53 

N.  Y.  103,  45,  46,  63 

People  V.  Golden  Rule,  114  111. 

''4  ^ 

People  V.  Higgins.  15  111.  110,  36 
People  V.  Medical  Society,  33 

N.  Y.  187,  39,  36,  54 

People  V.  Medical  Society,  24 

Barb.  570,  31,  27,  37,  44,  48,  49 
People  V.  Mechanics'  Aid  Soc, 

22  Mich.  86.  48,  89 

People  V.  Mutual  Life,  92  N. 

Y.  105,  305 

People  V.    Nelson,  46    N.    Y. 

477,  3 

People  V  N.  Y.  Com.  Ass'n,  18 

Abb.  Pr.  271,  41,  43,73 

People  V.  N.  Y.  Cotton  Exch., 

8  Hun.  210,  54 

People  V.  Ruiikel,  9  lohn.  147,  131 
People  V.  Steele,  2  Barb.  397,  161 
People  V.  Throop,  13  Wend  , 

187,  13,  26 


XX 


TABLE    OF    CASES, 


People  V.  Tuthill,  31  N.  Y.  559,  33 
Pfeiifer  v.  Mt.  Horeb,  etc.,  13 

Daly  161,  67,  75,  413 

Phillip   V,   Aurora   Lodge,  87 

Ind.  505,  '^  117 

Phoenix   Ins    Co.  v.  Baker,  85 

111.  210,  306 

Phoenix  Mutual  v.  Doster,  106 

U.  S.  30,  328 

Phoenix   Mutual  v.   Hinesley, 

75  Ind.  1,  327 

Phoenix  Ins.  Co.  v.  Raddin,  120 

U.  S.  183,  337 

Phoenix  Mutual  v.  Kaddin,  7 

Sup.  Ct.  Rep.  500,  343 

Phoenix  Ins.  Co.,  v.  Slaughter, 

12  Wall.  404,  339 

Piedmont  Ins.  Co.  v.  Ewing,  92 

U.  S.  377,  374 

Piggott  V.  Thompson,  3  Bos.  & 

Pull.  Repts    146,  94 

Pingree  v.  Jones,  80  111.181,  231 
Pipe  V.  Bateman,  1  Iowa  3fi9,  95 
Pitcher  v.  Board  of  Trade,  121 

111.  412,  73,  74,  86 


SECTION. 

Pomeroy  v.  Ins.  Co.  40  111.  400,     168 
Porter  v.  Robinson,  30  Hun. 

209,  123 

Poultney  v.  Bachman,  31  Hun. 

49,  17,  79,  130,  360,  368 

Powell  V.  Abbott,  9  W.  N.  C 

231,  1.  24,  76 

Presbyterian   Fund  v.    Allen, 

106  Ind.  583.  201,206 

Price  V.  Supreme  Lodge,  Tex  , 

20,  195 
Proctor  V.  Proctor,  141  Mass 

165,  243 

Protection    Life  v.  Foote,  79 

111.361,  116,  300,  301 

Protection  Life  v.  Palmer,  81 

111.  88,  288 

Provident    Life  v.   Baum,    29 

Ind.  236,  177 

Provident  Life  v.  Fennell,  49 

111.  180,  304 

Pulford  V.  Fire  Department,  31 

Mich.  458, 

1,21,32,51,54,166,378,308 


R. 


Rabb  V.   Reed,  5    Rawle  155, 

138,  147 
Raikes  v.  Wark,  1  Hare,  445,  242 
Ranisbarger  v.  Union  Mutual, 

72  Iowa,  191,  390 

Raub   V.    Masonic   Mutual,    3 

Mackey  68,  23,  194,  209 

Rawls  V.  American  Mutual,  27 

N.  Y.  282.  177,  201 

Rawson  v.  Rawson,  52  111.  62, 

248,  357 
Ray  V.  Powers,  134  Mass.  22.  113 
Red  Jacket  Tribe  v.  Gibson,  70 

Cal.  128,  148 

Redway  v.  Swerting,  L.    R.   2 

Exch.  400,  103 

Reeve  v.  Parkins,  2  J.   &  W. 

300,  138 

Refining  Co.  v.  Ins.  Co..  12  Ont. 

App  '418,  371 

Reform  Church  v.  Seminary,  4 

N.  J.  Eq.  77,  157 

Reichard  v.  Manhattan  Ins.  Co. 

31  Mo.  518,  373 

Remington  v.  Congdon,  2  Pick. 

310,  109 

Renk  v.  Herman  Lodge,  4  De- 

marest  409,  310,  233,  234 


Rex  V.  Mayor  of  Liverpool,  3 

Burr.  723.  37,  43 

Rex  v.  Richardson,  1  Burr.  517,  39 
Rex  V.  Sutton,  10  Mod.  76.  52 
Rice  V.  New  Eng.  Mut.,  Mass.,  337 
Richards  v.  Miller,  62  111.  417,  257 
Richardson  v.  Union  Society, 

58  N.  H.  187,  16,  124.  125 

Richmond  v.  Johnson,  28  Minn. 

447,  201,  264 

Richmond  v.  Judy,  6  Mo  App. 

465,  101,  102 

Ricker  v.  Charter  Oak,  etc.,  27 

Minn.  195,  201,  246 

Ridgely  v.  Dobson,  3  W.  &  S. 

118,  101 

Rigby  v.  Connoll,  14  Ch.  Div. 

482,  20 

Rigby  V.  Connoll,  28  W.  R.  650,  131 
Rindge  v.  N.  E.  Mutual,  Mass., 

8,232 
Robbins  v.  Waldo  Lodge,  78 

Me.  565,  151 

Roberts  v.  Roberts,  64  N.  C. 

695,  238 

Robertson  v.  Metropolitan,  etc., 

88  N.  Y.  54,  340 


TABLE   OF    CASES. 


XXI 


8KOTION. 

Robinson  v.  Duvall,  79  Ky.  83, 

245a,  258, 261 
Robinson  v.  Irish  American, 

Cal.,  363 

Robinson  v.  Robinson,  10  Me. 

240,  101 

Robinson  v  Yates  City  Lodge, 

86  111.  598,  74,  275 

Rocchi's  Appeal,  69  Pa.  St.  462,     158 
Roehler  v.  Mechanics'  Aid  Soc, 

22  Mich.  86,  53 

Rogers    v.  Capitol   Life,  Pa., 

287,  288 
Rogers  v.  Jones,  1  Wend,  238,  15 
Rood  V.  Benefit  Association,  31 

Fed.  Rep.  61,  41,  316 


SECTION. 

Rorlce  v.  Russell,  2  Lans.  244, 

63, 111 
Rosenberger    v.    Washington 

Mutual  87  Pa.  St.  207, 

164,  278,  283 
Roswell   V.   Equitable  Aid,  13 

Fed.  Rep.  840,  279,  335,  406 

Royal  Templars  v.  Curd,  111 

111.  284,  174 

Ruse  V.  Mutual,  etc.,  24  N.  Y. 

653,  332 

Ruse  V.  Mutual   Ben.  26  Barb. 

556,  288,  328 

Ryan  v.  World  Mutual,  41  Conn. 

168,  348 


St.  Clair  Co.  Ben.  Soc.  v.  Fliet- 

sam,  97  111.  474,     172,  192,  386, 400 
St.  Mary's  Ass'n  v.  Lynch,  N. 

H.,  123.  140,  141 

St.  Mary's  Soc.   v.  Burford,  70 

Pa.  St.  321,  26 

St.    Patrick's,   etc.   Society,  v. 

McVey,  62  Pa.  St  519.  17 

St.  Paul  Ins.  Co.  v.  McGregor, 

63  Texas.  399, 
Sabin  v.  Grand  Lodge,  N.  Y., 

184,  204, 205, 
Sale  V.  Baptist  Church,  62  Iowa 

26. 
Sande  v.  Groves,  58  N.  Y.  94. 
Sands   v.  Hill,  42  Barb.    651, 
Sanford  v.  Ins.  Association,  63 

Cal.  547, 
Sawyer  v.  Upton,  91  U.  S.  665, 
Sanders  v.  Robinson,  144  ]\Iass. 

306, 
Sawyer  v.   Baldwin,  11  Pick. 

495, 
Scudding  v.  Lorant.  Eng.  L.  & 

Eq.  16, 
Schassberger  v.  Staendel,  9  W. 

N.  C.  379, 
Scheu  V.  Grand  Lodge,  17  Fed. 

Rep.  214, 
Schillinger  v.  Boes,  Ky., 
Schmidt  v.  Lincoln  Lodge,  Ky., 
Schnook  v.  1.  O.  S.  B.,21  J.  & 

S.  181, 
Schunk  V.  Gegenseitiger  Fund, 

44  Wis.  370,  163,  803 

Schwarz  v.  Germania,  etc.  Co., 

18  Minn,  448,  826 


371 


45 
298 
279 

307 
99 

200 

157 

123 

35 

313 

231 
88 

181 


Schwarzbach     v.      Protection 

Union,  25  W.  Va.  622,  343 

Scott  V.  Provident  Mutual,  N. 

H.,  269 

Seamans  v.   N.  W.  Mutual,  3 

Fed.  Rep.  328,  328 

Semmers  v.  Ins.  Co.,  13  Wall. 

158,  370 

Sergeant  v.  Whitaker's  Case,  2 

Salk.  435,  69 

Servatins    v.   Pickel,   34  Wis. 

292,  109 

Servoss  v.  Western  Mutual,  67 

Iowa  86,  338 

Shamrock  Ben.  Soc.  v.  Drum, 

1  Mo.  App.  320,  341 

Sheldon  v.  Ins.  Co.  26  N.  Y. 

460,  304 

Sherman  v.  Commonwealth,  82 

Ky.  102,  163 

Sherman  v.  Sherman,  3  Barb. 

387  245 

Shurtieff  v.  Stevens,  51  Vt.  501,  109 
Sibley  v.  Central  Club,  40  N. 

J.  C  296.  310 

Siebert  v.  Chosen  Friends,  23 

Mo.  App.  268,  287,  376 

Simeral  v.    Dubu((Ue   Mutual, 

18  Iowa  322,  166 

Sizer  v.  Daniels,  66  Barb.  427,  105 
Skillings  v.  Mass.  Ben.  Ass'n, 

Mass.,  187,  189 

Skilton  V.  Webster,  Brightlev's 

Repts.  023,  "157,  161 

Smith  V.  Ball,  107  Pa.  St.  352,    353 


XXll 


TABLE   OF   CASES. 


SECTION. 

Smith  V.   Covenant    Ass'n,  24 
Fed  Rep.  G85,  236,  394,  396, 

403,  404 

Smith  V.  Nelson,  18  Vt.  511,     158 

Smith  V.  Smith,  3  Desau  557, 

143, 152 

Smith  V.  Society,  12  Phil.  380,    356 

Smith  V.  Swormstedt,  16  How. 
Pr.  888,  157 

Smiths'  Society  v.  Vandyke,  2 
Whart.  308,  48,  356,  413 

Snow   V.  Wheeler,  113   Mass. 
179,  20,  149 

Society  v.  Commonwealth,  52 
Pa.  St.  125,  48,  52 

Society  of  Gunmakers  v.  Fell, 
Willes  Repts.  384,  21 

Society    etc.  v.  Meyer,  52  Pa 
St  125,  1241,582, 

Sourse  v.  Marshall,  23  Ind.  194,      92 

Spare  v  Home  JMutual,  17  Fed. 
Rep  568,  371 

Spears  v.   VYard,  48  Ind.  541,    367 

Splawn  V.  Chew,  60  Texas  532, 

201,  227 

Springmeir  V.  Benevolent  Asso- 
ciation, 5  Cin.  Law.  Bull.  516, 

Stadler  v.  I.  O.  B.  B.,  3  Am.  L."' 

Rec.  589,  92, 133,  147 

Stamm  v.  N.  W.  Mutual,  Mich., 

145,  354 
State  V.  Algemeiner  Verein,  5 

Cin.  L.  B.  295,  51,  75 

State  V.  Bankers'  Association, 

23  Kan.  499,  3 

State  V.  Benevolent  Society,  72 

Mo.  146,  2,  163 

State  V.  Benefit  Association,  6 

Mo.  App.  163,  2,  163 

State  V.  Brawner,  15  Mo.  App. 

597,  163 

State  V.  Bridge  Co.  20  Kan.  404,    388 
State  V.  Central  Ohio  Mutual, 

£9  Oh.  St.  399,  4.  142,  179 

State  V.  Chamber  of  Commerce, 

20  Wis.  63,  22,  42, 48,  49,  72 

State  V.  Chamber  of  Commerce, 

47  Wis.  670,  27,  72,  75,  129 

State  V.  Critchett,  32  N.  W.  R. 

787,  2 

State  V.   Curtis,  9   Nev.    325, 

15,23 
State  V.  Graham,  66  Iowa  26,  163 
State  V.  Iowa  Mutual,  59  Iowa 

125,  164 


SECTION. 

State  V.  Medical  Society,  38  Ga. 

608,  2;^,  48,  49,  53,  59 

State  V.   Miller,  66   Iowa,  26, 

21,  72,  279 
•State  V.   Monitor  Association, 

42  Oh.  St.  555,  3,  23,  355 

State  V.  Mutual  Aid,  35   Kan. 

51,  164 

State  V.  Mutual  Association,  18 

Neb.  276,  163 

State     V.    Mutual     Protective 

Ass'n,  26  Oh.  St.  19,  141,  164 

State  V.  N.  W.  Mutual,  16  Neb. 

549,  163 

State  V.  Odd  Fellows,  8  Mo. 

App.  148,  29 

State  V.  Overton,  24  N.  J.  Law 

440,  15 

State  V.  Peoples' Ass'n,  42  Oh. 

St.  579,  122,  141,  151,  179 

State  V.  Portugese  Society,  15 

La.  Ann.  73,  50,  66 

State  V.  Railroad  Co  ,  43  N.  J. 

L.  505,  388 

State  V.  SlavonskaLipa,  28  Oh. 

St.  695,  84 

State  V.  Societe  Republicaine, 

9Mo.  App.  114,  140,143 

State  V.  Society  for  Support  of 

the  Sick,  5  Cin.  L.  Bull.  125,      50 
State  V.  Standard  Life,  38  Oh. 

St.  281,  21,  32.  122,  188 

State    V.    Trustees    of    Salem 

Church.  Ind.,  388 

State  V.  Turnpike  Co.,  16  Oh. 

St.  308.  388 

State  V.  Union  Merchants'  Ex- 
change, 2  Mo.  App.  86,    22,  26, 42 
State  V.  Vigilant  Ins.  Co,  30 

Kan.  585,  163 

State  V.  Williams,  75  N.  C  134,      22 
Stale  Council  v.  Sharp,  38  N. 

J.  Eq.  24,  144 

Stebbins  v.  Jennings,  10  Pick. 

172,  157 

Stephenson  v.  Ins.  Co.,  54  Me. 

70,  369 

Stephenson  v.  Stephenson,  64 

Iowa,  534,  224 

Stevedores'       Association     v. 

Walsh,  2  Daly  1,  20 

Stevens  v.  Eden  Meeting  House, 

12  Vt.  688,  123 

Stewart  v.  Lee  Mutual,  64  Miss. 

499,  118, 392 


TABLE    OF    CASES, 


XXlll 


SECTION. 

Stockdale  v.  School  District, 

47  Mich.  226,  16 

Stoddard  v.  Onondago  Confer- 
ence, 12  Barb.  570,  97 
Story  V.  Williamsburgh  Ass'n, 

95  N.  Y.  474,  181 

Streetj^  v.  Wood,  15  Barb.  105,    110 
Strickland  v.  Pritchard,  37  Vt. 

324,  143 

Strong  V.  Harvey,  3  Bing.  304,     103 
Sturgess  v.  Board  of  Trade,  86 

111.  441,  85 

Stylow  V.  Wis.  Odd  Fellows, 

Wis.,  327, 339 

Suppiger  v.  Covenant  Mutual, 

20  lil.  App.  595, 

392,  894,  401,  401« 
Supreme  (/ommandery  v.  Ains- 

worth,  71  Ala.  436,  163,  166 

Supreme  Council  v.  Fairman. 

62  How.  Pr.  386,  3,  164 

Supreme  Council  v.  Garrigus, 

104  Ind.  133,  361 

Supreme  Council  v.  Perry,  137 

Mass.  580,  210,  233 


SECTION. 

Supreme  Lodge  v.  Abbott,  82 

Ind.  1,  172,  303.  375 

Supreme  Lodge  v.  Johnson,  78 

Ind.  110,  67,  174 

Supreme  Lodge  v.  Martin,  12 

Ins.  C.  Jour.  638,         170,  178. 184 
Supreme  Lodge  v.  Schmidt,  98 

Ind.  374,  367,  375,  377 

Susquehanna  Mutual  v.  Gack- 

eubach,  115  Pa.  492,  277,  280 

Sutherland  v.   Sutherland,  60 

111.  481,  248 

Sweeney  v.  Beneficial  Society, 

14  W.  N.  C.  466.  22,  42 

Swett  V.  Citizens'   Mutual,  78 

Me.  541, 

1,  116,  341,  350,  355,  398,  411 
Swick  V.  Home  Life,  2  Dillon 

160,  374 

Swift  V.  Benefit    Association, 

96  111.309,  193,  201,  228 

Swift  V.  Mass.  Mut.,  63  N.  Y. 

186,  377 

Swift  V.  San  Francisco  Board, 

67  Cal.  567,  163,  210,  214 


Tartar  v.  Gibbs,  24  Md.  323, 
Taylor  v.  Aetna,  etc.,   Co.,  13 

Gray  434, 
Taylor  v.  Charter  Oak,  9  Daly 

489, 
Taj'lor    V.  Griswold,   2  Green 

222, 
Taylor  v.  Relief    Union,  IVIo. 

379,  392, 
Tennessee  Lodge  v.  Ladd,  73 

Tenn.  616,  184,201, 

Tenney  v.  N.  E.   Prot.  Union, 

37  Vt.  64, 
Ter    Vree    v.     Geerlings,    55 

Mich.  562,  120, 

Teutonia  Life  v.  Anderson,  77 

111.  384, 
Thomas  v.  Ellmaker,  1    Par. 

Tel.  Cas.  98,  146, 

Thomas  v.  Leake,  67  Texas  469 

Thomas  v.  Whallon,  31  Barb. 

178,  277, 

Thompson  v.  Garrison,  22  Kan. 

766. 


T, 

155  Thompson  v.  Ins.  Co.,  104  U.  S. 

252,  328,  329,  367,  375 

326      Thompson  v.  Ins.  Co.,  52  Mo. 

469  328 

389      Thwing  v.  Ins.   Co.,  Ill  Mass 

109.  168 

120      Tibbitts  v.  Blood,  21  Barb.  650, 

115 
394      Timayenis  v.  Union  Mutual,  21 

Fed.  Kep.  592,  379 

217      Tobin  v.    West.  Mut.  Aid,  72 

Iowa  261,  335,  394,  403 

108      Todd  V.  Emly,  7    Mees.  &  W. 

427,  100 

156  Torane    v.    Howard  Ass'n,    4 

Barr.  519,  357,  364 

304      Torrey  V.  Baker,  1  Allen  120,        10 

Treadway  v.  Ins.  Co.,  29  Conn. 
147  68,       '  12,  166 

Tyler    v.    Odd    Fellows,    145 
247         'Mass.  134,  190 

Tyrell   v.  Washburn,  88  Mass. 
283  60,  113 

Tuston  V.  Hardey,  14  Beav.  232, 
106  374 


XXIV 


TABLE  Oy  CASES. 


U. 


Farmers'    Ins. 
500,  349 

Iowa  Legion, 

281,  335 
V.   Pottker,  33 

306 
Union  Mutual  v.  Montgomerv, 
Mich.,  301,  216,  266a. 


Underwood    v. 

Co..  57  N.  Y, 
Underwood  v. 

66  Iowa  134, 
Union   Central 

Oh.  459, 


Union  Mutual  v.  Howry,  96  U. 

S.  544,  166 

Union  Mutual  v.  Wilkinson,  13 

Wall  222,  409 

United    Brethren  v.  Schwartz, 

Pa.  St.,  336 

U.  S  Exp.  Co.  V.  Bedbury,  34 

111.  459,  97 


V. 


Valley   Mutual  v.    Burke, 

Ins'  L.  J.  337, 
Van  Bibber  v.  Van  Bibber. 

Ky.  347, 
Van  Houten  v.  Pine,  38  N. 

Eq.  72, 
Van  Pouche  v.  St.  Vincent 

ciety,  Mich., 
Van  Wych  v.  Aspinwall,  17 

Y.  190, 
Vasconcellos  v.    Ferraria, 

111.  237, 
Vaux  V.  Henderson,  2  J.  & 

388, 


12 

377 
,82 

201,  235 
J. 

323,  331 
So- 
26,  365 
N. 

109 
27 

155,  157 
W. 

248 


Venable  v.  CofEman,  2  W.  Va. 
310, 

Vestry  &  Wardens  v.  Barks- 
dale,  1  Strob.  Eq.  197, 

Vette  V.  Clinton  Ins.  Co.,  30 
Fed.  Rep.  668, 

Viall  V.  Genesee  Mutual,  19 
Barb,  440, 

Viele  V.  Germania  Ins.  Co.,  26 
Iowa  9, 

Vollman's  Appeal,  92  Pa.  St. 

Volger  V.  Ray,  131   Mass.  439, 


158 

122 

871 

339 

339 
,50 
101 


W. 


Wachtel  v.  Society,  84  N.  Y.  28, 

65,  67,  285,  308 
Waite  V.  Merrill,  4    Me.    102, 

64,  152 
Walker  v.  Wainright,  16  Barb. 

486,  75 

Wall  V.  Home  Ins.  Co.,  8  Bosw' . 

597,  348 

Walsh  V.  Ins.  Co.  30  Iowa  133, 

12,  166 
Wangelin  v.  Goe,  50  111.  463,  86 

Ward  V,  Saunders,  3  Sneed  387, 


248 
161 

48 


Wardens      v.     Barksdale,      1 

Strobh.  197, 
Waring  v.  Medical  Society,  8 

Am.  L.  Reg.  533, 
Warnock  v.  Davis,  104  U.  S. 

775,  195 

Warren  v.  Mower,  11  Vt.  385,      123 
Warwicke  v.  Noakes,  1  Peake 

R.  67,  300 

Washington    Endow.,  etc,    v. 

Wood,  4  Mackey  19,  239 

Washington  Life  v.  Haney,  10 

Kan.  525,  201,377 


Watkins  v.  Wilcox,  66   N.  Y. 

654,  158,  160 

Watson  V.  Avery,  2  Bush.  332,  156 
Watson  V.  Centennial  Mutual, 

21  Fed.  Rep.  698,        181,  339,  343 
Watson  V.  Jones,  80  U.  S.  679, 

156,  158,  159,  161 
Weakly  v.  N.  W.  Benevolent, 

etc.,  19  111.  App.  327,  293 

Weber  v.  Zimmerman,  22  Md. 

156,  70 

Weir  v.  Bush,  4  Littell  430,  121 

Weisert  v.  Muehl,  81  Ky.  336,  193 
Weld  V.  May,  9  Cush.  181,  148 

Wells  V.  Gates,  18  Barb.  554,  103 
Wells  V.  Turner,  16  Md.  133,  113 
Wendt.  V.  Iowa  Legion  of  Hon. 

or,  72  Iowa  682,'  225 

Wetmore  v.  Mutual  Aid,  etc., 

23  La.  Ann.  770,  293 

Wheeler  v.  Insurance   Co.,  82 

N.  Y.  543,  329 

White  V.  Brownell,  4  Abb.  Pr. 

162;  2  Daly  329,        36,  55,  62,  79 
80.  360 


TABLE    OF    CASES. 


XXV 


SECTION. 

White  V.  Brownell,  ;'.  Abb.  Pr. 

318,  5G,  151 

White   V.  Conn.  Ins.    Co ,   120 

Mass.  330,  328 

White  V.  Equitable    Union,  76 

Ala.  251,  5 

Whitehurst  v.  Whitehurst,  Va.,    236 
White  Lick  v.  White   Lick,  89 

Ind. 136,  155,  158,  159,  160 

Wiffgin  V.  K.  of   P.,  31-  Fed. 

Rep.  122,  171,301,375 

Wilburn  v.  Wilburn,  83  Ind.  55, 

201,  251,257,365 
Wilents  v.  N.  W.   :Mutual,  81 

Ind.  300,  171,  326 

Williams  v.   German  Mutual, 

68  111.  387,       67.  277,  280,  285,  295 
Wilson  V.  Island    Church,    2 

Rich-  Eq.  192,  101 

Wilson    V.    Wriiiht,  8   Kv.  L. 

Rep.  963,  '  ■  118 


SECTION. 

Winebrenner  v.  Colder,  43  Pa. 

St.  244,  157 

Winsor  v.  Odd,  13  R.  I.  149,        245 
Wolf  V.  Schleiifer,  2  Brews  562, 

98,  102,118 
Wood  V.  Finch,  2  F.  &  F.  447,  101 
Wood  V.  Humphrey,  114  3[ass. 

185,  367 

Wood  V.  Woad,  9  Ex.  Ch.  190, 

60.  64,  65 
Woolsey  v.  I.  O.  O.  F.,  61  Iowa 

492, 
Worden  v.  Gdn.  Mutual,  39  N. 

Y.  Sup'r  Ct.  317, 
Worlev  V.  N.  W.  Masonic,  10 

Fed'  Reji,  227, 
Wright  V.  Mutual  Association, 

43  Hun.  61, 
Waesthoff  v.    (4ermania    Ins. 

Co.,  107  N.  Y.  580, 


413 
345 
237 
173 
379 


Yoe  V-  Mut.  Ben.  Ass'n,  63 
Md.  86,  316,329,392 

Yonge  V.  Ins.  Co.,  30  Fed. 
Rep.  902,  168,  169 

York  Co.  Mutual  v.  Kni!:,ht,48 
Me.  75,  67,  285 


York  Co.    Mutual    v.    Myers, 

Pa.,  278 

Young  V.  Hunter,  6  N.  Y.  207      328 


Z. 


Zeigler  v.  Mutual   Aid,  1    .Mc- 
(iloin  284,  318 


PART   I. 

The  Law  of  Voluntary  Societies. 


CHAPTER  I. 
Charter  and  Constitution. 

Sec.  1.  Generally. 

Sec.  2.  Object  of  society  must  be  authorized  by  organic  law. 

Sec  3.  Plan  of  doing  business  must  be  authorized  by  organic  law. 

Sec  4.  Certificate  of  incorporation,  how  the  manner  of  doing  business 

should  be  set  forth. 

Sec.  5.  Object  of  the  society  must  be  legal. 

Sec.  6.  When  corporate  existence  may  not  be  attacked. 

Sec  7.  The  doctrine  of  ultra  vires. 

Sec.  1.  Generally.  The  articles  of  incorporation  of  a 
society,  and  the  statutes  under  which  they  are  formed,  are  its 
charter,  and  its  fundamental  and  orsjanic  law,  subject  to  the- 
constitution  and  general  laws  of  the  State.  They  lix  the  rights 
of  its  members,  and  are  in  the  nature  of  a  fundamental  con- 
tract in  form  between  the  corporators,  and,  in  practical  effect,, 
between  the  society  and  its  members,  w^iich  neither  party  is^ 
at  liberty  to  violate,' 

The  society  and  each  member  of  it  are  bound  by  the  char- 
ter, and  neither  can  do  what  it  does  not  authorize." 

The  articles  of  association  of  an  unincorporated  society  bear 
the  same  relation  to  it  that  a  charter  bears  to  an  incorporated 
society.  They  regulate  the  duties  of  its  officers,  and  the  duties 
and  obligations  of  its  members  among  themselves,  and  define 
the  scope  of  its  business.^ 

These  articles  of  association  are  commonly  called  the  con- 
stitution of  the  society,  and  such  constitution  is  the  fundamen- 
tal law  of  the  society,  and  must  govern  its  members  in  all 
things.  All  by-laws,  rules  and  regulations  must  be  passed  in 
conformity  with  its  provisions,  and  must  not  be  in  any  wise 
in  conflict  with  them.* 

'Bergman  v.  St.  Paul  Mutual.etc,  ^pray  v.  Farwell,  81  N.  Y.,  600. 

29  Minn.  275.  •■  Powell     v.    Abbott,    9    Weekly 

*Rosenbergor  v.  Washington  Mu-  Notes  of  Cases  231. 

tual,  etc.,  87>a.  St.  207.  (1) 


3  CHARTER   AND    CONSTITUTION.  [CuAP.  1,  §2. 

AVbere  an  existing  unincorporated  society  is  chartered,  and 
its  constitution  is  expressly  recognized  by  the  charter,  such 
constitution  thereby  becomes  practically,  by  reference,  a  part 
of  the  charter.' 

"Where  an  unincorporated  mutual  benefit  society  procures  a 
charter  of  incorporation,  and,  by  a  vote  of  the  incorporated 
society,  all  members  of  the  voluntary  association  are  made 
members  of  the  incorporated  society  without  new  applications, 
this  is  a  reinsurance  of  the  life  of  such  members,  on  their 
original  applications,  in  the  incorporated  society, — is  a  mere 
continuation  of  the  contract  of  insurance  entered  into  by  and 
between  the  associates,  in  which  the  incorporated  society  takes 
the  place  of  the  first  society. 

The  members  so  admitted  into  the  new  society  have  no 
greater  rights  against  it,  under  their  contract  of  insurance,  than 
they  had  against  the  first  society,  and  any  fact  which  rendered 
the  contract  invalid  as  against  the  first  society  furnishes  a 
good  defense  for  the  new  society  to  an  action  upon  it. 

In  other  words,  an  invalid  contract  with  an  unincorporated 
society  is  not  made  valid  by  the  incorporation  of  the  members 
thereof,  and  the  assumption  by  that  corporation  of  the  con- 
tracts of  the  unincorporated  society.^ 

§  2.  Object  of  society  must  be  authorized  by 
•organic  law.  The  act  of  incorporation  is  to  a  corporation 
an   enabling  act;    it  gives  to  the  corporation  all  the  power  it 

possesses. 

A  corporation  is  the  mere  creature  of  the  act  to  which  it 
owes  its  existence,  and  may  be  said  to  be  precisely  what  the 
incorporating  act  has  made  it,  to  derive  all  its  powers  from 
the  act,  and  to  be  capable  of  exerting  its  faculties  only  in  the 
manner  which  that  act  authorizes.' 

An  act  for  the  incorporation  of  societies  can  never  be 
extended  by  construction  to  cases  not  reasonably  within  its 
terms. 

Where  an  act  of  the  legislature  authorizes  the  formation  of 
corporations  exclusively  for  literary,  scientific  and  benevolent 
purposes,  a  society  organized  under  this  act  for  religious  pur- 
poses is  not  legally  incorporated,  and  is  usurping  functions 
from  which  it  may  be  ousted.  There  is  a  well  defined  distinc- 
tion between  i-eligious  purposes,  and  those  which  are  merely 

'  Pnlford  V.  Fire  Department,  31  Society,  78  Me.  541 :  7  Atl.  Rep.  394. 
Mich.  453.  "  Head  v.    Ins.  Co.  2  Cranch  127. 

-  Swett  V.  Citizens,  Mutual  Relief    Phillips  on  Insurance  pg.  9. 


Chap.  1,  §3.]        charter  and  constitution. 


literary  and  scientific,  and  religious  purposes  differ  also  from 
those  of  general  benevolence.' 

A  society,  the  object  of  which  is  to  endow  the  wife  of  each 
member,  when  he  shall  have  married,  with  a  sum  of  money 
■equal  to  as  many  dollars  as  there  are  members  of  the  associa- 
tion, to  be  raised  by  assessment  on  them,  is  not  a  "  benevolent 
society  "  for  the  purposes  of  incorporation  under  laws  relating 
to  incorporation  of  benevolent  societies. 

It  is  clear  from  the  plan  of  such  a  society  that  it  is  not  in- 
tended to  bestow  any  benelit  or  help  without  what  is  thought 
to  be  an  equivalent.  The  undertaking  of  the  society  to  pay 
is  not  in  any  sense  benevolent,  but  is  a  quid  j^ro  quo;  it  is 
paid  for." 

A  society  for  mutual  insurance  may  not  be  incorporated 
under  laws  providing  for  the  incorporation  of  benevolent  soci- 
eties.^ 

But  notwithstanding  such  societies  so  organized  are  not 
corporations  dejure,  they  must,  at  least  as  between  its  mem- 
bers, be  regarded  as  corporations  dejacto.* 

A  society  for  pecuniary  gain,  organized  for  the  purpose  of 
aiding  its  members  by  loans  or  advances  of  money,  is  not  a 
"  benevolent"  or  "  charitable"  society  within  the  meaning  of 
the  act  of  1848  of  New  York,  providing  for  the  incorporation 
■of  benevolent,  charitable,  scientitic  and  missionary  societies." 

§  3.  Plan  of  doing-  bnsiness  must  be  author- 
ized by  organic  law.  The  plans  of  doing  business  set 
forth  in  the  charters  of  societies,  while  they  may  and  do  differ 
widely  in  detail,  must  fall  within  the  statutes  under  which 
such  corporations  are  organized,  and  the  purposes  of  the 
organization  must  be  such  as  are  provided  for  in  those  laws. 

In  its  articles  of  incorporation  "  The  Golden  Rule  "  declared 
its  objects  to  be,  among  other  things,  to  assist  its  members  in 
the  struggles  incident  to  life,  to  secure  for  them  in  their  old 
age  mutual  aid  and  protection,  and  to  establish  a  fund  for  the 
benefit  and  relief  of  widows  and  orphans  of  deceased  members. 

It  was  held  that  this  society  having  for  its  object  in  part 

'  People  ex.  rel.  v.  Benevolent  So-  senting;  State  v.  Benevolent  Societ\-, 

ciety4l    Mich.  67;    People  ex  rel.  v.  73  Mo  146;   State  v.  Benefit  Assn. 

Benevolent  Society  24  How.  Pr.  210.  6  Mo.  App.  163;  Commonwealth  v. 

*  State  ex  rel.  v.   Critchett  et  al.  Wetherbee  105  Mass.  14!). 
Minn.  33  N.  W.  Rep.  787.  ■*  Foster  v.  Pray  et  al.  Minn.  29  N 

» State  V.  Critchett,  Minn.  32  N.  W.  W.  Rep.  155. 
Rep.  787;  Fo.sterv.  Pray  ^<  rti.  Minn.         *  People  v.   Nelson,  46  N.  Y.  477 

29  N.W.  Re]).  155;   People  ex  rel  v.  CO  Barb.  159. 
Nelson,  46  N.  Y.  477.  Folger,  J.  dis- 


4  CHARTER    AND    CONSTITUTION.  CuAP.  1,  §3.- 

the  benefit  of  its  members  generally,  and  not  wholly  the 
benefit  of  the  widows,  orphans,  heirs  and  devisees  of  deceased 
members,  and  members  who  have  received  a  permanent  dis- 
ability, was  not  properly  organized  under  the  laws  providing 
for  benefits  to  widows,  orphans,  etc.,  and  was  usurping  powers- 
not  conferred  upon  it  by  law.' 

A  proceeding  in  the  nature  of  a  quo  warranto  \v2i?>  instituted 
against  a  society,  alleging  that  it  was  exercising  the  powers  and 
functions  of  an  insurance  company,  without  having  complied 
with  the  insurance  law.  It  was  held  that  a  society  issuing 
policies  on  the  lives  of  its  members,  payable,  in  case  of  death, 
to  the  widow,  orphans,  heirs  and  devisees  of  the  members,  and 
to  them  alone,  and  providing  in  its  by-laws  that  each  member 
may  be  assessed,  for  the  general  expense  fund,  in  such  sums  as 
may  be  determined  upon  by  the  trustees,  not  to  exceed  $20  in 
any  one  year,  is  not  a  life  insurance  company  under  the 
statute  which  requires  a  capital  of  $100,000  in. money  or- 
securities  before  transacting  its  business,  and  the  act  amenda- 
tory thereof. 

A  clause  in  the  act  under  which  this  society  was  organized 
provided  that  no  member  should  receive  any  money  as  profit 
or  otherwise.  In  construing  this  clause,  the  court  held  that 
it  was  designed  to  prevent  the  corporation  from  making 
dividends  of  profits  among  its  members,  and  that  the  payment 
of  an  officer  who  was  a  member,  for  services  rendered,  would 
not  be  "  receiving  money  as  profit." 

In  discussing  the  questions  involved,  the  Court  says:  "The 
appellant  was,  no  doubt,  an  insurance  company  in  the  general 
and  enlarged  sense  of  that  term.  It  issued  policies  to  its 
members,  which  were  payable  upon  the  death  of  a  member 
whose  life  was  insured,  and  did  various  other  acts  which  are- 
usually  done  by  life  insurance  companies,  but  this  did  not 
necessarily  bring  it  within  the  definition  of  a  life  insurance- 
company,  as  that  term  is  used  in  the  act "  regulating  ordinary 
insurance  companies.^ 

When  the  law  provides  that  a  society  may  furnish  relief  tO' 
members  on  account  of  sickness,  or  other  physical  disability, 
it  is  proper  for  the  society  to  provide,  in  its  contract  of  insur- 
ance, for  relief  to  members  who  shall  have  attained  the  age  of" 
seventy -five  years;  the  attainment  of  such  an  age  is  a  "  physical 
disability,"  within  the  true  intent  and  meaning  of  the  act.^ 

'  The  Golden  Rule  v.  People  ex.  v.  People  ex.  reZ.,90  111.,  166. 
rel,  118     111.,  492;   People  v.    The         ^  Supreme    Council    v.   Fairman,. 

Golden  Rule,  114  111.,  34.  62  How.  Pr  (N.  Y.)  386. 

"  The  Commercial    League,    etc., 


•Chap.  1,  §3.]         charter  and  constitution.  5 

Where  the  law  under  which  a  society  is  organized  provides 
that  the  members  shall,  from  time  to  time,  be  assessed 
specilically  to  pay  such  losses  and  expenses  as  may  be  incurred, 
the  society  may  not  adopt  a  plan  of  insurance,  by  which  the 
members,  upon  advance  payment  of  an  agreed  annual  deposit, 
shall  be  exempted  from  liability  to  assessment  to  pay  losses 
occurring  during  the  year  for  which  such  pre-payment  was 
made,  and  by  which  a  contract  of  insurance  may  be  declared 
forfeited,  for  the  non-payment  in  advance  of  an  annual  deposit, 
whether  an  assessment  during  such  year  to  pay  losses  may  be 
necessary  or  not. 

Such  annual  deposit  paid  in  advance,  based  upon  a  table  of 
mortality,  and  without  reference  to  an  amount  necessary  to 
pay  losses  that  may  occur  during  the  year,  is  in  fact  a  premium 
paid  for  carrying  the  risk,  and  not  a  specific  assessment. ' 

Where  the  law  under  which  a  society  is  organized  provides 
that  the  "members  shall  receive  no  money  as  profit,"  any  plan 
•or  scheme  by  which  profits  are  made,  or  divided,  is  unauthor- 
ized. A  plan,  by  which  annual  deposits  are.  required  to  be 
made,  aiid,  if  these  annual  deposits  exceed  the  necessary 
expenses  and  losses  during  a  given  year,  they  are  to  be  treated 
as  "  savings,"  out  of  which  dividends  are  to  be  made  to  those 
who  may  then  be  members,  is  contrary  to  such  provision  of 
the  law.'' 

Where  the  statute  under  which  a  society  is  incorporated 
prohibits  the  payment  of  any  money  to  a  member  as  profits 
and  provides  that  no  part  of  the  funds  collected  for  the  pay- 
ment of  death  benefits  shall  be  applied  to  any  other  purpose, 
it  is  not  lawful  for  the  society  to  do  business  upon  a  plan  by 
which  it  agrees  that,  at  the  end  of  ten  years  the  tontine  or 
guarantee  fund,  consisting  of  twenty-five  per  cent  of  death 
assessments  collected,  will  be  distributed  equally  among  the 
surviving  members  of  the  tontine  class.  Such  a  division  of 
the  tontine  fund  and  its  accumulation  of  interest  among  the 
surviving  members,  is  contrary  to  the  provisions  of  the  law. 

The  purpose  of  the  incorporation  of  a  society  was  stated,  in 
its  charter,  to  be  as  follows: 

"The  object  or  purpose  of  this  association  shall  be  the  crea- 
tion of  a  fund,  by  making  mutual  pledges  and  giving  valid 
obligations  of  its  members  to  and  with  each  other,  for  their 
own  insurance  from  loss  by  death  of  its  members.    *     *     *     * 

'  State  ex.    rel.  vx.  Monitor,  etc.,         '  Idem. 
Assn.  42,  Ohio  St.  555. 


6  CHARTER    AND    CONSTITUTION.  [ChAP.  1,  §5^ 

This  association  shall  have  no  capital  stock;  it  shall  receive 
no  premiums,  nor  make  any  dividend,"  etc. 

An  action  of  quo  warranto  was  brought,  claiming  that  the 
society  was  doing  an  insurance  business  not  authorized  by  its 
charter.  The  society,  by  its  plan  of  insurance,  required  of  a 
member,  as  a  condition  of  membership,  and  at  the  time  of 
joining,  a  deposit  "of  one  dollar  for  each  and  every  year  of  his 
age,  counted  at  his  nearest  birthday,  which  deposit  shall  form 
pledge  or  guaranty  for  the  payment  of  assessments  for  death 
losses  and  annual  dues." 

In  deciding  that  the  society  was  doing  such  a  business  as 
was  authorized  by  its  charter,  the  Court  says: 

"But  this  fund  is  not  a  fund  for  the  payment  of  losses,  but 
a  guaranty  of  the  payments  of  the  assessments. 

Upon  the  death  of  a  member,  this  guaranty  deposit  is  paid 
to  his  beneficiary,  and  this  in  addition  to  and  independent  of 
the  proceeds  of  the  assessment.  Upon  a  failure  to  pay  his 
assessments,  the  deposit  is  forfeited  to  the  company,  and  the 
interest  received  upon  the  investment  of  the  deposit  belongs 
to  the  company,  and  from  these  accumulations  there  may 
come  a  fund,  out  of  which  the  amount  which  would  be  due  in  case 
of  a  death  can  be  paid  without  any  assessment,  and  provision  is 
made  for  such  contingency.  But  this  provision  against  a  large 
accumulation  of  funds  in  no  manner  changes  the  character  of 
the  association.  Its  purpose  and  object  is  still  the  collection 
of  assessments  from  living  members,  to  pay  the  beneticiary  of 
a  deceased  member." ' 

§  4.  Certificate  of  incorporation — how  the  man- 
ner of  doing  hnsiness  sliould  be  set  fortli.  A  certili- 
cate  of  incorporation  setting  forth  that  "  the  manner  of  carrying 
on  the  business  shall  be  such  as  the  association  maj^  from 
time  to  time,  prescribe  by  rules,  regulations  and  by-laws,  not 
inconsistent  with  the  laws  of  the  state  "  is  not  a  compliance 
with  the  law  of  the  state,  which  requires  the  certificate  to  show 
"  the  manner  of  carrying  on  the  business  of  said  association."  * 

§  5.     Object    of    society   must   be    legal.    It  i& 

evident  that  the  law  will  not  sanction  the  incorporation  of  a 
society  for  an  illegal  purpose,  and  will  refuse  to  recognize  the 
legal  existance  of  any  such  society. 

'  The  State  ex  rel  v.  Bankers',  etc.,  tual  Relief  Association,  29  Oh.  SU 
Association,  23  Kan.  499.  399. 

^  State  ex  rel.  v.  Central  Ohio  Mu- 


Chap.  1,  §6.]        charter  and  constitution.  7 

The  State  will  not  permit  those  who  are  subject  to  its 
laws  as  individuals,  to  defy  them  as  members  of  a  society 
which  has  been  brought  into  existence  under  its  laws.  Thus, 
while  persons  may  undoubtedly  meet  and  form  societies  for  the 
purpose  of  effecting  the  modification  or  repeal  of  some  ob- 
noxious and  oppressive  law,  still,  under  an  act  providing  for 
the  incorporation  of  voluntary  societies,  a  corporation  may  not 
be  formed  for  the  purpose  of  opposing  the  enforcement  of 
other  acts,  or  of  agitating  for  their  repeal,  or  to  influence  leg- 
islation, or  to  give  immunity  to  convicted  parties,  by  paying 
their  tines  for  them.  A  society  formed  to  oppose  the  enforce- 
ment of  the  liquor  laws  of  a  state  may  not   be   incorporated.' 

Where  the  object  of  an  incorporated  society  was  to  fix  and 
control  the  price  of  salt,  and  the  mode  in  which  this  was  to  be 
accomplished,  was  by  the  manufacturers  of  salt  on  the  Syracuse 
reservation  leasing  to  the  corporation  the  salt  blocks  owned 
by  them,  and  thus  giving  control  of  the  quantity  and  price  to 
the  society;  it  was  held  that  the  purposes  of  the  association 
were  in  violation  of  law,  and  those  concerned  in  it  were  guilty 
of  a  misdemeanor.^ 

The  object  of  a  society  was  declared  to  be  "  to  unite  accept- 
able young  people  in  such  a  way,  as  to  endow  each  with 
a  sum  of  money  not  to  exceed  $6,000.00  to  be  paid 
at  marriage  or  endowment,  according  to  the  regulations 
adopted."  A  certificate  of  membership  in  such  a  society  pro- 
viding "  that  no  member  will  be  entitled  to  any  benefit  what- 
ever, who  marries  in  less  time  than  three  months  from  the  date  of 
his  certificate,"  and  that  "  every  member  who  shall  have  been  in 
good  standing,  for  at  least  three  months  prior  to  his  marriage, 
shall  be  entitled  to  $40.00  ]ier  month  upon  each  $1 ,( H  »0.00  named 
in  his  certificate,  for  each  whole  month  of  his  membership,  pro- 
vided that  the  same  shall  never  exceed  $3,000.00,  or  so  much 
thereof  as  shall  be  realized  from  one  marriage  assessment  of 
all  the  members  of  this  class," — is  not  a  marriage  brokerage 
contract,  but  is  void  on  grounds  of  public  policy,  as  operating 
in  undue  restraint  of  marriai>;e,  by  offerinji:  an  inducement  fur 
its  indehnite  postponement.'' 

§  6.  When  corporate  existence  may  not  be  at- 
tacked.    It  may  be  stated  as  a  general  rule  that  the  corpo- 

'  Detroit    Schuetzen  Band  v..  De-  efit  Union,  7<)  Ala.  251 ;    Seoalso.  /ft 

troit  etc.  Verein,  44  Mich.  818.  re  Mutual  Aid  Association  for  Vn- 

'Clancey  V.   iSalt    Man'f'g  Co.  62  married  Persons.  l.">  Phil.  Repts. 625; 

Barb,  895.  In  re  Ilelpinij:  Hand  Marriage  Asscv- 

^  White  V.  Equitable  Nuptual  Ben-  ciation,  15  Phil.  Kepts.  644. 


8  CHARTER    AND    CONSTITUTION.  [ChAP.  1,  §7. 

rate  existence  of  a  society  may  not  be  attacked  in  a  collateral 
proceeding. 

Where  an  action  is  brought  on  a  written  certificate  of  mem- 
bership, sealed  with  the  company's  seal,  signed  by  its  president, 
and  duly  attested  by  its  secretary,  the  society  may  not  intro- 
duce evidence  showing  that  the  corporation  was  not  fully  or- 
ganized at  the  time  the  certificate  issued,  and  it  is  estopped  by 
its  own  deed  from  so  doing.' 

§  7.  The  doctrine  of  ultra  vires.  Cases  involving 
the  doctrine  of  %dtra  vires  have  arisen  and,  doubtless,  will 
arise  in  litigation  upon  contracts  of  insurance  in  mutual  ben- 
efit societies,  and  contracts  of  other  voluntary  societies,  but  a 
full  discussion  of  such  a  subject  is  beyond  the  scope  of  this 
treatise. 

It  is  sufficient  here  to  say  that  there  are  two  lines  of  decis- 
ions. The  principle  laid  down  in  one  may  be  stated  as 
follows : 

Where  it  is  a  simple  question  of  authority  to  contract,  aris- 
ing either  on  a  question  of  regularity  of  organization,  or  of 
power  conferred  by  the  charter,  a  party  who  has  had  the  ben- 
efit of  the  agreement  cannot  be  permitted,  in  an  action  founded 
upon  it,  to  question  its  validity.  The  usurping  or  excess  of 
corporate  power  is  a  matter  to  be  complained  of  by  the 
government,  and  places  the  society  in  danger  of  a  judgment 
of  ouster  and  dissolution. 

The  other  line  of  cases  permits  either  party  to  the  contract 
to  set  up  the  want  of  power  in  the  incorporated  society  to 
enter  into  such  a  contract — not  that  either  party  stands  in  a 
position  entitling  such  party  to  take  advantage  of  the  want  of 
such  powers,  but  on  grounds  of  public  policy;  and  the  defense 
so  set  up  is  regarded  as  the  defense  of  the  public,  not  that  of 
the  contracting  party  urging  it. 

The  authorities  in  favor  of  each  of  these  principles  might 
be  multiplied  almost  indefinitely,  though  the  current  of  the 
latest  decisions  is  decidedly  in  favor  of  the  proposition  as  first 
above  laid  down. 

It  is  proposed  to  illustrate  the  opposing  principles  only  by 
such  cases  as  have  arisen  in  incorporated  voluntary  societies. 

A  mutual  benefit  society  cannot  defend  against  a  suit  on 
one  of  its  contracts  of  life  insurance  upon  the  plea  of  ultra 

'  Mutual  Aid  v.  Paine,  111.  14  N.  Building  etc.  Association,  25  Ohio 
E.    Rep.    42;    Hagerman  v.     Ohio    State  186. 


■Chap.  1,  §7.]         charter  and  constitution.  9 

<vires,  when  it  has   been  receiving  the   assessments   on    the 
policy.' 

A  society  was  organized  under  the  law  of  Illinois  providing 
for  societies  "  for  the  purpose  of  furnishing  life  indemnity  or 
pecuniary  benefits  to  the  widows,  orphans,  heirs  or  relatives, 
by  consanguinity  or  athnity,  devisees  or  legatees  of  deceased 
members."  It  issued  a  certificate  of  membership,  payable  to 
William  Blue  who  was  in  no  wise  related  to  the  member, 
Wm.  K.  Bailey.  After  Bailey's  death,  Blue  brought  an  action 
upon  the  certificate,  and  the  society  set  up  as  a  defense  its 
articles  of  incorporation  under  the  above  law;  that  plaintiff 
was  not  a  legatee  or  devisee  of  Bailey  and  not  related  to  him 
by  affinity  or  consanguinity,  etc.  In  discussing  this  plea  the 
Supreme" Court  of  Illinois  says:  "It  is  contended  that  all 
persons  not  named  in  the  act  are  prohibited  from  becoming 
beneficiaries.  It  will  be  observed  that  the  contract  involved 
is  not  absolutely  prohibited  by  statute.  All  that  can  prop- 
erly be  claimed  is  that  it  was  not  expressly  authorized  by  the 
statute.  The  defendant  voluntarily  issued  the  policy,  it  re- 
ceived the  premiums,  and  Bailey  fully,  so  far  as  appears,  per- 
formed all  that  his  contract  required  him  to  do.  So  far  as  he 
.  is  concerned,  the  contract  is  an  executed  one.  Now,  upon  the 
death  of  Bailey,  when  the  defendant  is  called  upon  to  perforin 
its  part  of  the  contract,  can  it  refuse,  and  defeat  a  recovery, 
by  claiming  that  the  contract  is  ^dtra  vires  f  We  think  the 
law  on  this  question  is  well  settled  that  such  a  defense  cannot 
be  made  availing.  Where  the  contract  has  been  fully  per- 
formed by  the  party  contracting  with  the  corporation,  and  the 
■corporation  has  received  the  benefit  from  such  contract,  it 
cannot  invoke  the  doctrine  of  ultra  vires  to  defeat  an  action 
brought  against  it  on  such  contract."  ' 

An  act  authorized  the  organization  of  societies  for  the  pur- 
pose of  securing  certain  benefits  "  to  the  family  or  heirs  of 
any  member  upon  his  death.'" 

The  contract  of  insurance  showed,  in  the  answers  to  inter- 
rogatories in  the  a])plication,  that  the  beneficiary  named  in  the 
■certificate  of  membership  was  in  no  way  related  to  the  mem- 
ber, and  not  in  any  way  a  member  of  his  family,  and,  in  the 
-certificate,  the  beneficiary  was  .described  as  "  friend  of  "  the 
member. 

The  Supreme  Court  of  Michigan  held  that  the  society  might, 

'Matt  V.    lioman     Catholic     etc.     v.  Blue,  120  111.  121 ;  11    N.  E.  Rep. 
Society,  Iowa;  30  N.  W.  Rep.   799.     331. 
^^  Blomington  Mm.  Life  Ben.  Ass'a 


10  CHARTEK    AND    CONSTITUTION.  [ClIAP.  1,  §8. 

in  an  action  on  the  certificate,  set  up  as  a  defense  the  want  of 
insurable  interest  in  the  beneiiciary,  and  says:  "The  asso- 
ciation issued  this  certificate  under  circumstances  which  most 
strongly  call  upon  the  courts  to  enforce  performance  of  its 
agreement,  if  certain  imperative  rules  of  public  policy  do  not 
forbid.  The  defense  set  up  in  this  case  must  be  considered  as 
that  of  the  public,  and  not  that  of  the  defendant,  as  it  stands 
in  no  position  to  interpose  such  a  defense."  • 

§  8.  Ultra  vires  continued.  Although  a  certificate 
of  membership  in  a  mutual  benefit  society  contain  the  name 
of  a  creditor  of  the  member  as  beneficiary,  in  violation  of  the 
law  authorizing  such  societies  to  issue  certificates  for  the  bene- 
fit of  widows,  orphans,  or  dependents  of  members,  yet,  where 
the  certificate  recognizes  that  there  may  be  a  change  or  sub- 
stitution of  such  beneficiaries,  and  provides  that,  in  case  the 
member  survives  all  the  original  or  substituted  beneficiaries, 
the  insurance  shall  be  for  the  benefit  of  the  heirs  of  the  insured, 
the  administrator  of  the  insured  may  maintain  an  action  on  such 
certificate,  although  the  petition  avers  that  the  action  is  for  the 
benefit  of  the  creditor.* 

The  opinion  in  this  case  makes  one  or  two  valuable  sugges- 
tions as  to  the  application  of  the  doctrine  of  ultr^a  vires  to 
contracts  of  mutual  benefit  societies.  In  this  opinion  it  is 
said:  "The  designation  of  beneficiaries  in  the  policy  or  certi- 
ficates of  membership  is  invalid,  as  the  statutes  under  which 
the  defendant  corporation  was  organized  did  not  authorize  it 
to  grant  insurance  for  the  benefit  of  friends.  But  an  invalid 
designation  of  beneficiaries  does  not  render  the  whole  contract 
invalid.  The  contract  in  terms  recognizes  that  there  may  be 
a  change  or  substitution  of  beneficiaries,  and  there  is  a  provi- 
sion that,  if  the  member  shall  survive  all  original  or  substi- 
tuted beneficiaries,  then  his  membership  shall  be  for  the  bene- 
fit of  his  legal  heirs.  *  *  *  If  there  is  no  other  legal  designa- 
tion, this  may  take  effect.  The  defendant  contends  that 
the  declaration  avers  that  the  action  is  brought  for  the  bene- 
fit of  (the  creditor  named  in  the  certificate),  and  therefore  that 
the  action  cannot  be  maintained.  This  objection  cannot  be 
supported.  If  the  plaintiff  (the  administrator)  receives  the 
money,  it  will  be  a  good  discharge  to  the  defendant  of  its 
liability;  and  the  defendant  will  not  be  responsible  for  the  pro- 
per application  of  the  money  by  the  plaintiff.     It  is  to  be  as- 

'  Mutual  Ben.  Ass'n  v.   Hoyt,  46        '  Rindge  v.   New  England    Mut 
Mich.  47a ;  9  N.  W.  Rep.  497.  Aid  Soc.    Mass.  15  N.  E.  Rep.  628. 


Chap.  1,  §8.]         tharter  and  constitution.  11 

fiumed,  at  this  stage  of  the  proceedings,  that  he  will  dispose 
of  the  funds  properly;  and  he  may  be  compelled  to  do  so  by 
judicial  proceedings,  to  which  the  defendant  would  not  be  a 
necessary  party.  The  averment  tliat  the  action  is  brought  for- 
the  benefit  of  (the  creditor)  is  unnecessary,  and  may  be  dis- 
regarded." 

A  society  in  its  charter  declared  its  object  to  be  "  for  the 
general  purpose  of  improvement  and  welfare  of  the  members 
and  others,  and  for  the  particular  object  of  mutual  relief  of  the- 
members  of  the  association  in  time  of  sickness  and  distress." 

It  was  held  that,  under  this  charter,  the  society  might  pro- 
perly carry  on  a  system  of  mutual  benefit  insurance,  and  make 
the  widows  of  deceased  members  the  beneficiaries  of  the  fund 
raised  by  assessment  upon  its  members.' 

A  society  provided  in  its  charter:  "The  business  of  said 
association  shall  be  to  afford  relief  to  the  widows  and  children 
of  its  deceased  members,  and  to  such  business  it  shall  be 
limited  and  restricted." 

A  member  became  insured  in  the  society,  designated  his 
wife  as  his  beneficiary,  and  provided  in  the  designation  that 
his  children  should  take  the  fund,  if  he  should  survive  his 
wife.  He  became  indebted  to  the  society  in  a  large  amount 
for  money  loaned  him,  and,  by  agreement  between  himself 
and  the  society,  made  a  new  designation,  "  as  per  assignment 
attached  and  balance  if  any  to  my  wife  *  '•  *  and,  in 
case  she  be  dead,  to  my  children."  The  assignment  attached 
was  to  the  society  to  secure  his  indebtedness  to  it.  Afterwards 
the  member  died  in  good  standing  as  such. 

The  Supreme  Court  of  Wisconsin  lield  that  his  children,, 
the  wife  being  dead,  were  entitled  to  the  whole  fund,  and  that 
the  loan  of  money  by  the  society  was  in  excess  of  its  corporate 
powers  and  void. 

Kyan,  C.  J.,  dissented  as  to  the  ground  upon  wliich  the  de- 
cision was  placed,  and,  upon  th'e  question  of  the  validity  of  the 
loan,  held  that  a  corporation  may  employ  the  corporate  prop- 
erty, when  it  would  otherwise  be  lying  idle  and  profitless,  for 
such  purposes  as  are  not  alien  to  its  primary  business,  may 
rent  its  waste  lands,  invest  its  unemployed  capital,  and  place 
its  money  at  deposit  account,  citing  Brice  on  Ultra  Vires, 
68.  lie  further  says:  "  If  the  insurance  of  the  husband  for 
the  benefit  of  his  wife  and  children  were  subject  to  his  con 
trol  the  corporation  could    lend  its  money  to  him  or  for  hi& 

'  Gundlach  v.  Germania  Mechanics 
Ass'n.,  49  How.  Pr.  190. 


12  CHARTER   AND    CONSTITUTION.  [ChAP.  1,  §9. 

benefit,  and  take  security  on  tlie  contract  of  insurance. 
Wlietlier  the  husband  had  such  control,  seems  to  be  the  con- 
trolling question  in  this  case.'" 

§  10.  Ultra  vires  continued.  An  incorporated 
church,  may  not  as  a  corporation,  engage  in  the  sale  of  tickets 
to  the  public  for  an  excursion  on  board  a  steamer  which  the 
•church  has  chartered  for  the  occasion.  Expenses  incurred, 
with  a  view  of  profit,  and  profits  lost,  cannot  be  recovered, 
from  the  owners  of  the  vessel  on  their  failure  to  make  the 
stipulated  voyage.  Excursions  as  matter  of  trade  or  business 
with  the  public  are  not  within  the  means  or  ends  for  which 
the  church  was  incorporated.  The  measure  of  recovery,  in  a 
suit  by  the  church  against  the  owners,  is  the  amount  that  has 
been  paid  as  hire  for  the  vessel/^ 

Where  the  charter  of  a  society  restricts  its  membership  to 
persons  under  the  age  of  fifty  years,  the  society  has  no  power 
to  authorize  the  admission  of  members  over  that  age,  and 
there  can  be  no  w^aiver  of  this  qualification.^ 

A  Masonic  lodge  loaned  a  sum  of  money,  and  afterward 
brought  suit  to  enforce  its  collection.  The  court  held  that 
there  could  be  no  recovery;  that  where  the  charter  confers 
upon  a  society  no  power  to  lend  money,  and  the  society  lends 
monej'  without  authority  under  its  charter,  and  takes  a  pro- 
missory note  to  secure  the  repayment,  the  contract  is  void. 
The  court  says.  "No  action  to  enforce  the  contract,  w^hatever 
form  the  pleader's  skill  may  give  it,  can  be  maintained.'" 

'  Dietrich  et  al  v.  Relief  Associa-  ^Luthe  v.  Farmer's  M.  F.  Ins.  Co. 

tion.  45  Wis,  79.  55  Wis.  543. 

•  Harrinan  et.  al.  v.  Baptist  Church  •»  Grand    Lodge    F.    &   A.   M.  v. 

'63  Ga.,  186.  Waddill,  36  Ala.  313. 


CHAPTER  II. 


By-Laws. 


Sec.  11.  Inherent  power  of  societies  to  pass  by-laws. 

Sec    12.  When  by-laws  are  binding  upon  members. 

Sec  13.  Concerning  by-laws  in  general. 

Sec.  14.  Unwritten  by-laws,  custom. 

Sec.  15.  Construction  of  by-laws. 

S  r'  19  ('  Alteration,  amendment  and  suspension  of  by-laws. 

Sec   2(1   ) 

o     ■  oo'  \  "The  by-laws  of  a  society  must  be  legal. 

Sec.  23.     The  by  laws  of  a  society  must  be  consistent  with  its  charter. 
Sec  24.    The  by-laws  of  an  unincorporated  society  must  be  consistent 

with  its  constitution. 
Sec  25.    The  by-laws  of  an  unincorporated  society  must  not  be  con<- 

trary  to  law. 
Sec.  26.  [  The  by-laws  of  an  incorporated  society  must  be  reasonable- 
Sec.  27.  J      and  necessary. 

Sec.  11.  Inherent  power  of  societies  to  pas* 
by-laws.  An  incorporated  society  has  inherent  power  to 
make  such  by-laws,  rules  and  regulations  as  may  be  necessary 
to  carry  its  charter  into  effect,  and  to  accomplish  the  purpose 
for  which  it  was  organized.  A  grant,  in  general  terms,  of 
the- power  to  make  such  by-laws  is  usually  contained  in  the 
organic  law  of  the  society,  or  the  charter  founded  upon  it,  but 
it  is  by  no  means  necessary,  and  adds  nothing  to  the  inherent 
power  of  the  society  in  that  regard. 

This  power  to  make  by-laws  necessarily  includes  the  power 
to  alter  and  amend  them,  and  it  may  be  exercised  by  a* 
majority  of  the  members. 

An  unincorporated  society,  however,  exists  by  agreement 
of  its  members,  and  a  majority  has  only  such  powers  as  are 
conferred  by  the  articles  of  association.  Such  a  society  has- 
no  inherent  powers,  ]f  no  provision  of  the  contract  of  asso- 
ciation gives  to  the  majority  of  the  members  the  right  to  alter 
and  amend  such  contract,  the  majority  has  no  power  of  legis- 
lation over  the  minority,  and  changes  and  additions  may  be 
made  only  by  unanimous  consent. 

For  this  reason  the  articles  of  association  usually  confer 
upon  the  majority,  or  two-thirds  of  the  members,  the  power  of 

(13) 


14  BY-LAWS.  [Chap.  2,  §12. 

legislating  for  the  general  interest  of  the  society,  and  provide 
how,  and  when  tlie  constitution  and  by-laws  may  be  altered 
and  amended. 

§  13.    When  by-laws  are  binding  upon  members. 

By-laws  are  subject  to  certain  laws  which  are  set  forth  in 
•  detail  in  tiiis  chapter.  Subject  to  these  laws,  the  by-laws  of 
an  incorporated  society  regularly  passed  are  binding  upon  all 
members.  The  power  of  government  of  an  incorporated  society 
is  in  the  majority,  under  the  contract  of  membership.  Under 
this  contract,  a  member  is  bound  by  the  by-laws  in  force 
when  he  becomes  a  membei",  and  such  as  shall  thereafter  be 
regularly  passed.  If  the  member  shall  object  to  such  by-laws 
as  are  subsequently  passed,  he  may  resign  his  membership  and 
-escape  the  elfect  of  tliem;  but  if  he  continue  his  membership, 
he  is  bound  by  them.i 

Where  the  articles  of  association  of  an  unincorporated 
society  are  silent  as  to  any  power  to  alter  them,  and  a  major- 
ity of  the  members  vote  to  change  them,  the  change  so  made 
is  valid  and  binding  as  to  all  who  voted  for,  assented  to,  or 
in  any  way  acted  on,  or  enjoyed  the  beneiits  of  such  change. 
And  acquiescence  in  the  change  for  a  time  after  it  has  become 
known  to  a  member,  will  be  construed  as  an  adoption  of  it. 
But  such  change  is  not  binding  on  a  protesting  minority. 
Where,  however,  power  is  given  to  the  majority  of  the  mem- 
bers at  a  regular  meeting  to  alter  rules  atfecting  the  general 
interests  of  the  society,  changes  made  will  be  binding  upon 
all  members  continuing  their  membership." 

One  who  becomes  a  member  of  a  mutual  benefit  society  is 
•chargeable  with  knowledge  of  the  provisions  of  its  charter  and 
by-laws,  and  is  bound  by  them.' 

He  cannot  be  ignorant  of  them,  nor  can  he  refuse  obedience 
"to  them,  unless  they  are  illegal,  or  require  the  performance  of 
acts  which  the  law  forbids. 

It  is  sometimes  said  that  a  member  is  hound  to  know  the 
rules  of  the  society.  This  is  true,  but  it  is  not  to  be  under- 
stood by  the  use  of  the  word  "  rules  "  that  reference  is  made 
to  the  regulations  adopted  by  the  officers  of  the  society  in 
regard  to  the  transaction  of  business,  but  rather  such  rules  as 
enter  into  the  constitution  of  the  society  as  provisions  of  its 

'  See  §16.  102  Ind.,   262;    1   N.  E.   Rep.    571; 

^  Kelhembeck    v.    Norddeutscher  Coles  v.  Iowa  State  Mutual,  etc.,  18 

.Bund,  10  Daly  (N.  Y.)  447.  Iowa,  425. 
"  Bauer    v.    Samson  Lodge,  etc., 


Chap.  2,  §13.]  by-laws.  15 

<;harter  or  its  by-laws.  Rules  in  the  nature  of  instructions  to 
officers  and  agents,  directing  the  discharge  of  their  duties,  etc., 
<}annot  be  meant,  but  rather  the  rules  whereby  the  liability 
and  rights  of  members  of  the  society  are  fixed,  which  are 
parts  of  the  institution.' 

Where  tlie  by-laws  of  a  society  set  forth  specifically  the 
powers  and  duties  committed  to  local  agents,  a  member  is 
charged  with  knowledge  of  the  limits  of  such  powers,  and 
cannot  claim  that  notice  to  one  of  such  local  agents  concern- 
ing matters  without  the  scope  of  his  authority  and  duty,  under 
such  by-laws,  is  notice  to  the  society.' 

^13.  Generally.  A  by-law  of  an  incorporated  mutual 
benefit  society  must  be  general,  and  apply  to  all  members  alike. 
If  it  is  invalid  as  to  one  member,  it  is  invalid  as  to  all. 

It  must  stand  on  its  own  validity,  and  it  cannot  be  shown, 
as  sustaining  its  validity,  that  a  dispensation  was  granted  to  a 
member  against  whom  it  was  invalid,  exempting  him  from  its 
provisions,  and  that  all  the  other  members  of  the  society 
assent  to  it,  and  are  willing  to  be  bound  by  it. 

A  member  of  such  a  society  cannot  be  subjected  to  any 
conditions  which  do  not  apply  to  all  alike,  and  cannot  be 
compelled  to  receive  immunity  from  a  by-law,  as  a  matter  of 
grace,  when  he  is  not  bound  by  it  as  a  matter  of  right. 

Upon  the  other  hand,  it  is  unjust  to  the  other  members 
that  there  should  be  personal  exemptions  of  a  general  nature 
from  any  valid  regulations  that  bind  the  mass  of  the  corpor- 
ators.' 

Such  a  society  cannot  ignore  its  by-laws,  and  lawfully  con- 
tract with  a  particular  member  for  life-insurance  on  a 
different  plan  or  basis  than  applies  to  all  other  members,* 

AVhere  a  by-law  is  a  mere  rule  of  conduct  in  its  business 
affairs,  imposed  on  itself  by  the  society  for  its  own  benefit  and 
convenience,  it  may  be  disregarded  by  its  officers.  Where  the 
by-laws  declared  that  clerks  should  hold  their  offices  during 
the  pleasure  of  the  board  of  directors,  it  was  held  that  the 
])oard  might  employ  a  clerk  for  a  year,  and  bind  the  company 
by  such  employment.'^ 

If  the  charter  prescribe  the  mode  in  which  the  by-laws  shall 

'  Walsh     V.    Insurance     Co.,    30  ^  People    ^-.i'    rel.    v.     Benevolent 

Iowa,  133145;  Treadway  v.  Insur-  Society.  41  Mich,  fiO. 

ance  Co.,  29  Conn.,  68;   llale  v.  In-  *  Cleveuger  v.  Mutual    Life,  etc., 

surance  Co.,  G  Gray  (Mass.)  169.  2  Dak.  114. 

-  Mitchell    V.  Lycoming  Mutual,  '  Martino  v.   Ins.  Co.,   47    N.  Y. 

etc.,  51  Pa.  St.,  402.  Super.  Ct  520. 


16  BY-LAWS.  [Chap.  2.  ^13. 

be  made  and  adopted,  in  order  to  their  validity,  that  mode 
must  be  strictly  pursued.  But  where  the  charter  is  silent 
upon  this  point,  it  may  adopt  its  by-laws  in  any  manner  it 
may  prescribe. 

When  the  mode  of  electing  corporate  officers  is  not  prescribed 
by  charter,  it  may  be  wholly  ordained  by  by-laws. 

If  a  mutual  beneiit  society  be  composed  of  separate  bodies,, 
whether  co-ordinate  or  subordinate,  the  by-laws  and  rules  of 
the  society  for  the  management  of  its  internal  affairs,  and  for 
the  adjustment  of  the  relations  between  its  branches,  constitute 
the  law  by  which  they  should  be  governed. 

A  by-law,  to  be  entitled  to  the  name,  mnst  be  some  regula- 
tion which  operates  upon  all  members  alike.  A  resolution,, 
which  prohibits  one  particular  officer  .of  the  society  from 
inspecting  its  books,  cannot  be  called  a  by-law.' 

It  is  a  general  rule  that  the  by-laws  of  a  society  are  binding 
upon  no  one,  except  its  officers  and  members,  but  where  a 
person  who  deals  with  a  society  is  acquainted  with  the  methods 
of  doing  business  pointed  out  in  its  by-laws  for  its  govern- 
ment, he  is  presumed  to  have  contracted  with  reference  to 
them,  and  is  bound  by  them.^ 

The  by-laws  of  a  mutual  benefit  society  are  binding  upon 
it  and  all  its  members,  and  its  contract  for  the  payment  of 
money  to  the  widow  and  heirs  of  a  deceased  member  is  to  be 
considered  and  construed  with  reference  to  its  powers  and 
duties,  as  fixed  by  its  charter  and  the  by-laws  pursuant  thereto ; 
and  such  widow  and  heirs  have  the  right  to  rely  on  the  per- 
formance of  such  by-laws.  Where  a  by-law  of  a  society  pro- 
vided that,  upon  receipt  of  notice  of  the  death  of  a  member,  the- 
secretary  should  immediately  forward  to  the  representatives 
of  the  deceased  the  proper  blanks  and  full  instructions  how  to 
make  proofs  of  death;  and  the  society,  upon  notice  of  the- 
death  of  a  member,  with  a  request  to  send  the  blanks  and 
instructions  as  to  the  required  proofs,  refused  to  send  them,  on 
the  claim  that  the  deceased  had  forfeited  his  rights,  and  his 
certificate  had  been  cancelled,  and  refused  payment  of  the 
sum  named  therein  on  that  ground  alone,  it  was  held  that 
this  was  a  waiver  of  the  preliminary  proof  of  death.  ^ 

Where  the  by-laws  provide  that  no  one  over  the  age  of 

'  People  V.  Throop,  12  Wend.  187.        ^  Covenant  Mut.  v.  Spies,  114  111. 
*  Cummings  v.  Webster,  43  Me.,    463. 
192. 


Chap.  2,  §1-1:.]  by-laws.  17 

iiftj  years  may  become  a  member  of  the  society,  this  qualifi- 
cation  may  be  waived  by  the  society.  ' 

§  14.  Unwritten  by-laws,  custom.  It  is  some- 
times said  that  by-laws  need  not  necessarily  be  in  writino-, 
but  may  be  adopted  by  long  continued  and  invariable  cus- 
tom. It  must  be  remembered,  however,  that  custom  may  not 
take  the  place  of  a  by-law,  but  that  it  may  be  resorted  to 
merely  as  evidence  of  the  adoption  of  a  by-law. 

No  custom  or  usage  is  shown,  which  affords  any  evidence 
of  the  adoption  of  an  unwritten  law,  where  it  appears  only  that 
the  society,  in  a  particular  matter,  has  been  accustomed  to  act 
in  a  particular  manner,  but  where  it  does  not  appear  when, 
how  long,  or  to  what  extent,  such  custom  has  been  pursued,  or 
whether  it  has  been  uniform,  or  only  adopted  in  particular  in- 
stances.    Such  a  custom  will  not  be  construed  into  a  by-law. 

"Where  a  society  has  expressly  adopted  a  code  of  by-laws, 
other  by-laws  will  not  be  implied  from  custom  or  usage.  The 
adoption  and  promulgation  of  a  code  of  by-laws  in  the  ordi- 
nary way,  by  an  express  vote  of  the  members  of  a  society,  ex- 
clude the  possibility  of  construing  additional  by-laws  from 
the  mere  customs,  or  modes  of  procedure,  which  the  society 
may  see  tit  to  adopt  in  the  administration  of  its  affairs.  '^ 

§  15.  Construction  of  by-laws.  The  by-laws  of 
mutual  benefit  societies  should  be  construed  liberally,  and  with 
a  view  to  effectuate  the  benevolent  purposes  of  their  organi- 
zation. 

Where  there  is  any  ambiguity  or  inconsistency  in  the  terms 
of  such  by-laws,  that  construction  is  to  be  given  them,  which  is 
most  favorable  to  the  rights  of  the  member. 

It  is  for  the  court  to  decide  whether  a  by-law  is  within  the 
power  of  the  society  to  pass,  under  the  express  or  implied 
terms  of  its  charter.  ' 

"Whether  a  by-law  be  reasonable,  or  not,  is  for  the  court  ta 
determine,  and  evidence  to  the  jury  on  that  question  is  inad- 
missible, " 

If  part  of  a  by-law  is  void,  and  the  whole  forms  an  entirety, 
so  that  the  part  which  is  void  influences  the  whole,  the  entire 
by-law  is  void.     The  principle  that  a  by-law  may  be  void  in 

'  Morrison  v.  Odd  Fellows  etc.  59  =*  State  v.  Overton  24  N.  J.  Law,  440. 

Wis.  162.  *  Commonwealth  v.  Worcliester  8- 

'^  District    Grand   Lodge    etc.    v.  Pickering,  (]\Iass).  461, 
Cohn,  20  111.  App.  335. 


18  BY-LAWS.  [Chap.  2,  §16. 

part,  and  valid  in  part,  applies  only  when  the  respective  por- 
tions are  wholly  independent  of  each  other.  ' 

§  16.  Alteration,  ameiidiiient  and  suspension 
of  by-laws  Incorporated  societies  possess  inherent  power 
to  alter,  amend,  or  suspend  their  by-laws,  provided  such  altera- 
tion, amendment,  or  suspension  does  not  interfere  with  vested 
rights. 

Subject  to  the  same  proviso,  unincorporated  societies  may 
alter,  amend  or  suspend  their  bj'-laws,  in  the  manner  and  to 
the  extent  set  forth  in  the  contract  of  association. 

Neither  the  majority  of  the  members,  nor  the  board  of 
directors,  have  a  right  to  disregard  a  by-law  which  has  been 
properly  passed;  a  by-law  can  be  repealed  only  in  the  manner 
prescribed  in  the  charter  and  by-laws. 

Where  the  by-laws  of  a  society  provide  that  no  changes  in 
the  by-laws  shall  be  made,  except  at  its  annual  meeting, 
and  that  none  shall  then  be  made  unless  two-thirds  of 
the  members  present  agree  thereto,  no  change  can  be  made 
except  in  the  manner  prescribed,  and  a  change  of  the  by-laws 
at  the  annual  meeting,  by  a  vote  of  less  than  two-thirds  of  the 
members  present,  is  invalid,  although,  after  the  meeting  is 
over,  enough  other  members  to  make  up  the  requisite  number, 
request  in  writing  to  be  permitted  to  record  their  votes  in  the 
affirmative.  ' 

It  has  been  held  that  a  by-law  which  can  be  passed  only  by 
a  two-thirds  vote,  cannot  be  rescinded  by  a  bare  majority.  ^ 

A  by-law  of  a  society,  requiring  a  two-thirds  vote  to  alter 
its  by-laws,  may,  nevertheless,  be  repealed  by  a  majority.  * 

No  member  of  a  voluntary  society  has  any  vested  right  in 
fund,  where  its  articles  of  association  provide  that,  under 
certain  circumstances  and  conditions,  the  society  will  look  into 
his  claim,  and  grant  him  such  relief  as  shall  appear  just  and 
reasonable;  and  the  society  may,  in  the  manner  prescribed, 
change  its  rule  for  the  disposition  of  its  fund,  and  make  a  new 
rule,  wholly  different  from  that  which  before  existed.' 

'  Angell  &  Ames  on  Corps,  at  sec-  ^  Stockdale  v.  School  District  etc. 

tion  858 ;    State  v.  Curtis,    9    Nev.  47  Mich.  236. 

325 ;  King  v.  The  Steward  etc.  8  T.  ■*  Richardson  v.  Union  etc.  Soci- 

R.    356 ;     Amesbury  v.    Bowditch  ety,  58  N.   H.  187 ;  Com.  v.  Mavor 

Mutual    etc.    6    Gray  (Mass).  596;  of  Lancaster,  5  Watts  152. 

Rogers  v.  Jones,  1  Wend,   (N.   Y).  'Torrey,  et  al  v.  Baker,  et  al,  1 

•238.  Allen  (Mass.)  120. 

-  Torry  et  al.  v.  Baker  et  al.   1 
Allen    (5lass).    120. 


'Chap.  2,  §17.]  by-laws.  19 

§  17.    Alteration,  ainendinent  and  suspension 

•of  by-laws,  continued.  A  member  of  a  society  does  not 
stand  in  the  relation  of  a  creditor  to  the  society,  and  he  can  claim 
only  such  benefits  as  are  prescribed  by  the  by-laws  existing  at 
•the  time  he  applies  for  relief. ' 

A  by-law  of  a  society  provided  that  a  member  who  was 
taken  sick,  or  otherwise  disabled  from  following  his  usual  or 
other  employment,  on  application,  should  receive  liv^e  dollars 
a  week.  In  October,  1876,  the  following  by-law  was  passed, 
according  to  the  rules  of  the  society;  "Be  it  resolved,  that  we 
suspend  the  weekly  payments  of  benefits  to  the  sick  members 
until  there  is  $SOU.OO  in  the  treasury."  Plaintiff  was  a  mem- 
ber at  the  time  of  the  adoption  of  this  by-law,  and  had  been 
long  prior  thereto.  He  became  sick  in  January  1877,  and  so 
continued  until  March  17.  1877. 

The  court  held  that  this  latter  by-law  was  binding  upon  the 
plaintiff,  and  that  he  was  not  entitled  to  sick  benefits  unless 
there  was  $800.00  in  the  treasury.' 

In  1849,  plaintiff  became,  and  ever  since  had  been,  a  mem- 
ber of  Hudson  City  Lodge  of  Odd  Fellows.  The  constitu- 
i;ion  and  by-laws,  which  were  signed  by  plaintiff,  provided 
that  daring  the  sickness  of  a  member  qualified  to  receive  sick 
"  benefits,"  he  should  receive,  if  he  had  attained  the  scarlet  de- 
gree,  four  dollars  per  week  after  the  first  two  weeks.  The 
constitution  also  provided  that  the  lodge  might  make,  alter  or 
amend  its  by-laws,  and  the  manner  of  doing  so  was  pointed 
out  in  the  by-laws.  July  9,  1878,  the  by-laws  were  regularly 
amended,  so  as  to  reduce  the  benefit  of  a  brother  who  had  been 
sick  for  twelve  months,  to  one  dollar  per  week.  The  plaintiff 
was  taken  sick  October  5,  1875,  and  continued  so  until  the 
commencement  of  this  action.  He  was  of  the  scarlet  degree, 
and  entitled  to  receive  sick  benefits.  He  was  paid  four  dollars 
a  week  down  to  July  9,  1878,  and  after  that  date  one  dollar  a 
■week.  He  brought  suit  to  recover  an  additional  three  dollars 
a  week  from  July  9,  1878, 

The  court  held  that  as  the  only  contract  between  the  plain- 
tiff and  the  lodge  was  contained  in  the  constitution  and  bv- 
laws,  they  should  all  be  considered  together;  that  the  lodge  had 
the  right  to  alter  the  by-law  fixing  the  amount  to  be  paid  to 
sick  members,  after  the  plaintiff  was  taken  sick,  and  that  he 
could  not  receive  the  amount  prescribed  by  the  former  one." 

'  St.     Patrick's    etc.     Society    v.  '  Poultuey  v.  Backmanu,  31  Ilun 

McVey,  92   Pa.    St.   510;    see  also  49,  ovemiliiie;  62  How.  Pr.  406  aud 

McCabe  v.  Father  Mathew  Society,  10  Abb.  N.  C.  252. 
24  Hun  149. 


20  BY-LAWS.  [ClIAP.  2,  §18, 

The  view  taken  by  the  court  in  this  case  was,  that  this  by- 
law did  not  seek  to  deprive  members  of  any  rights  that  might 
have  been  acquired  under  the  former  by-law;  it  was  not  in- 
tended to  be  retroactive.  The  society  acknowledged  its  liabil- 
ity under  the  former  by-laws,  and  paid  the  sick  member 
according  to  its  terms.  The  new  by-law  was  a  proper  one  for 
the  society  to  pass,  and  it  was  binding  for  the  future  upon  all 
its  members  whether  they  were  sick,  or  well,  at  the  time  of  its 
passage.  A  member  is  bound  by  proper  by-laws  legally 
passed,  whether  he  be  sick,  or  well. 

If  the  society  had  sought  to  give  the  by-laws  a  retroactive 
force,  and  to  deprive  him  of  three  dollars  a  week  for  any  time 
he  had  theretofore  been  sick,  it  would  have  been  null  and 
void. 

§  18.  Same  subject  continued.  In  Pellazzino, 
Guardian,  etc.  v.  The  German  Catholic  St.  Joseph  Society,  it 
was  held,  in  the  Superior  Court  of  Cincinnati,  that  an  amend- 
ment to  the  by-laws  of  a  mutual  benefit  society,  providing  for 
the  payment  of  stated  benefits  for  sick  members,  which  re- 
duces the  amount  of  such  benefits,  does  not  affect  a  right  to 
such  benefit,  which  had  become  vested  by  the  sickness  of  the 
member  before  the  adoption  of  such  amendment,  although 
made  by  virtue  of  a  by-law,  in  forcejwhen  such  member  joined 
the  society,  permitting  the  amendment  of  any  by-law. 

By  one  of  the  by-laws  of  the  society,  sick  members  were 
entitled  to  receive  three  dollars  per  week,  while  unable  to 
pursue  their  usual  business.  In  October,  1881,  Pellazzino,  a 
member,  became  insane,  and  so  remained.  By  the  original 
by-laws  of  the  society,  the  usual  right  to  amend  them  was  re- 
served; and  on  October  31,  1882,  an  amendment  was  duly 
adopted,  limiting  beneiits  to  sick  members  to  thirteen  weeks 
in  each  year.  The  only  question  in  the  case  was  whether 
the  rights  of  Pellazzino  to  benefits  during  his  then  existing 
inability  were  affected  by  this  amendment.  He  was  not 
present  at,  and  did  not  agree  to,  its  adoption.  The  court 
thought  that  his  rights  were  not  affected  by  the  amendment 
and  said: 

"A  right  to  amend  was  reserved.  But  it  was  a  right  to 
amend  the  by-laws,  not  to  repudiate  a  debt.  A  by-law  pro- 
vides what  the  rights  of  members  shall  be  in  certain  events,  if 
they  continue  to  pay  their  dues  until  such  events  happen ; 
this,  of  course,  by  virtue  of  the  reserved  right,  may  be  amended 
or   repealed.      But  when    the  event  happens,   what  was    a 


€hAP.  2,  §19.]  BY-LAWS.  21 

•contract  depending  on  a  contingency,  becomes  in  law  a  debt. 
The  right  to  modify  a  contract  does  not  include  the  right  to 
repudiate  a  debt,  any  more  than  the  reserved  right  of  a  legis- 
lature to  repeal  the  charter  of  a  corporation  gives  it  the  power 
to  confiscate  its  property.  The  rights  of  Pellazzino  as  a 
member,  including  his  contingent  right  to  benefits,  were  sub- 
ject to  modification,  whether  he  consented  at  the  time  or  not: 
his  rights  as  a  creditor,  when  by  falling  ill  he  became  one,  this 
contingent  right  so  becoming  fixed,  are  not  made  so  by  the 
language  of  the  contract  between  him  and  defendant,  and 
therefore  cannot  be  surrendered  except  by  his  consent.'" 

In  an  action  upon  the  by-laws  of  an  incorporated  society,  it 
appeared  that,  on  the  1st  of  November,  1877,  plaintiff  was  in 
arrears  to  the  society  for  dues,  but  on  November  14,  1877,  he 
•discharged  the  indebtedness  On  December  14,  1877,  plain- 
tiff  fell  sick  and  became  entitled  to  benefits.  These  were  not 
paid,  and  on  February  3,  1878,  a  by-law  was  passed  declaring 
that  a  person  in  arrears  should  not  be  entitled  to  benefits  until 
three  months  after  the  deficiency  should  be  discharged.  The 
society  claimed  for  the  by-law  a  retroactive  force,  and  refused 
to  pay  benefits  for  sickness  within  three  months  from  Nov, 
14,  1877. 

The  Supreme  Court  of  New  York  held  that  the  benefits  due 
for  the  sickness  from  December  14, 1877,  to  February  3, 1878, 
were  a  legal  debt  from  which  it  could  not  relieve  itself  by 
making  a  new  by-law;  that  the  by-law  passed  February  3, 
1878,  could  not  visit  a  punishment  upon  plaintiff  for  a  fault 
•committed  months  before  it  was  enacted." 

§  19.  Same  subject  continued.  A  by-law  of  a 
society  contained  this  provision,  viz: 

"  Upon  the  death  of  one  who  has  been  a  member  of  the  as- 
sociation for  six  months  last  prior  to  his  death,  his  widow 
shall  be  entitled  to  receive  the  sum  of  four  dollars  monthly 
during  widowhood."  A  member  who  had  been  such  for  more 
than  six  months  immediately  prior  to  his  death,  died,  leaving 
a  widow  surviving  him. 

At  the  time  of  his  death,  and  during  his  membership  in  the 
•society,  there  was  a  by-law  of  the  society  as  follows: 

"  A  revision  or  alteration  of  the  articles  of  the  association 

'  Pellazzino  V.  St.  Joseph's  Society,  N.  Y.  Weekly  Dig.  17:  Title  to  the 
16  Cin.  Law  Bui.  27.  cause  is  give'n  in  29  Hun  674,  but 

^  Coyle  V.  Fr.  Mathew,  etc.  Soc.  17    case  is  not  reported. 


22  BY-LAWS.  [Chap.  2,  §19: 

can  be  had  at  a  general  meeting  of  the  members  thereof  by  a 
majority  of  the  votes  of  the  members  present." 

Subsequent  to  the  death  of  the  member,  the  by-law  first  set 
forth  above  was  revised  in  conformity  with  the  by-law  con- 
cerning revisions  and  alterations,  and  was  made  to  read  as  fol- 
lows :  "  Upon  the  death  of  a  member  each  person  who  may 
be  a  member  of  the  society  shall  pay  to  the  widow  of  the  de- 
ceased member  the  sum  of  one  dollar." 

The  widow  sued  upon  the  original  by-law  for  the  arrears 
due  at  the  bringing  of  the  suit,  claiming  that  she  was  entitled 
to  four  dollars  per  month,  and  that  the  revised  by-law  did  not 
affect  her  rights. 

The  Court  says:  "The  main  question  is,  whether  the  allow- 
ance to  the  plaintiff  was  not  cut  off  by  the  adoption  of  the  new 
article  after  the  death  of  her  husband.  It  does  not  attempt  to 
do  so  by  any  language  which  points  to  such  a  result.  It  is  not 
in  form  retroactive,  and,  upon  familiar  rules  of  interpretation^ 
ought  not  to  be  so  construed  as  to  cut  off  rights  already  fixed. 
It  must  be  conceded,  I  think,  that  the  provision  in  favor  of 
the  plaintiff  was,  in  all  respects,  binding  as  a  contract  between, 
her  husband  and  the  association.  The  association  undertook 
to  pay  to  his  widow  a  monthly  allowance  after  his  death,  if,  at 
the  time  of  his  death,  he  was  a  member,  and  had  been  such 
member  for  the  preceding  six  months.  After  his  death,  it  is- 
not  perceived  how  the  association  can,  by  adopting  a  new  arti- 
cle, or  by  repealing  the  old  one,  relieve  itself  from  this  obliga- 
tion. But,  independent  of  this  consideration,  it  is  safe  to  say 
that  the  new  article  does  not,  in  form  or  substance,  attempt  tO' 
repudiate  its  obligations  when  they  had  already  been  fixed  by 
the  death  of  one  of  its  members."  ' 

In  1862,  a  person  became  a  member  of  a  voluntary  char- 
itable association.  The  by-laws  of  the  association  then  pro- 
vided that  members  paying  the  regular  assessments  should  be 
entitled  to  twenty -five  cents  per  day  durino;  their  sickness  ; 
that  the  society  would  pay  twenty-five  cents  per  day  to  the 
widow  of  each  member,  so  long  as  she  remained  a  widow; 
that  the  by-laws  might  be  amended  in  conformity  with  certain 
specified  rules.  In  1868,  said  association  was  incorporated  by 
act  of  the  legislature,  which  provided  that  it  might  alter  or 
change  its  by-laws.  The  by-laws  in  force  at  the  time  of  the 
passage  of  said  act,  were  continued  in  force  till  August,  1869, 
when  the  society  adopted  new  by-laws,  wherein  it  was  pro- 
Association,  49  How.  Pr.  190. 

^Gundlach  v.  Germania  Mechanics 


Chap.  2,  §20.]  by-laws.  23 

vided  that  such  widows  should  receive  twenty-five  cents  per 
day,  until  they  had  received  $200.00.  Prior  to  the  amend- 
ment of  the  by-laws,  on  January  5,  1869,  the  member  died, 
leaving  his  widow  surviving  him.  She  was  paid  $200.00  in 
all  by  the  society,  and,  upon  the  failure  to  pay  her  twenty-five 
cents  a  day  after  she  had  received  said  sum  of  $200.00,  she 
brought  an  action  for  about  $200.00  against  the  society,  being 
the  arrears  due  her  at  the  rate  of  twenty-five  cents  a  day  from 
the  time  she  had  received  the  $200.00,  as  provided  in  the 
amended  by-laws,  to  date  of  bringing  the  action. 

The  Court  held  that  the  society  had  the  right  to  amend  its 
by-laws  as  aforesaid,  and  that  the  widow,  having  received  said 
$200.00,  was  precluded  from  further  recovery. 

The  Court  says:  "The  regulation  limiting  the  widow's 
share  in  this  charity  to  $200.00,  was  made  by  a  general  law, 
and  applicable  to  all;  and  there  is  no  suggestion  of  fraud,  or 
that  the  regulation  was  not  wise  and  salutary. 

We  think  the  society  were  competent  to  make  this  by-law; 
and,  having  fully  performed  the  duty  imposed,  the  plaintiff 
can  not  recover.  But  in  this  case  there  was  an  express  pro- 
vision in  the  constitution  of  the  society,  that  the  by-laws 
might  be  changed,  and  the  manner  of  doing  it  was  specifically 
pointed  out;  so  that  the  husband  voluntarily  became  party  in 
an  association,  and  contributed  his  money  with  full  knowledge 
of  all  the  provisions  in  the  articles  of  association,  and  fully 
assented  to  the  same.  There  is  no  good  reason,  therefore,  for 
claiming  that  the  widow  had  a  vested  right  which  the  society 
could  not  modify."  ' 

§  '^O.      By-Laws    of   a    society    must   be    leg-al. 

The  by-laws  of  a  society  must  be  consistent  with  the  laws  of 

'  Fugure  v.  Mutual  Society  of  St.  tract  of  insurance  issued  by  it  is  a 

Joseph,  46  Vt.  362.    The  reasoning  sham   and  a  snare,  and  the  sooner 

in  this  opinion  is  all  to  the  effect  members  of  such  societies  are  made 

that  a  society  should  have  the  right  aware  of  the    frauile    and  illusory 

to  change  its    by-laws    in    accord-  obligations  for  which  they  are  pa}'- 

ance  with  its  necessities.   This  prop-  ing  out  their  money,  the  better  it 

osition  can  not  be  doubted.     But  to  will  be  for  them, 

hold  that  a  by-law  may  be  changed  Legislators  may  not  pass  laws  which 

by  the  society  after  the  member  has  impair  the  express  obligations  of  a 

performed  his  part  of  the  contract,  contract,    and    mutual    benetit     so- 

and  died,  and  when  his  beneficiary  cieties  should  not  be  permitted  to  do 

is  calling  upon  it  to  perform  its  part  so. 

of  the  contract,  is  to  sanction  the  re-  People   v.    Fire  Department,  31 

pudiation  of  a  debt.  If  a  society  may  Mich.  458  ;    Kent  v.  Mining  Co.,  78 

repudiate  its  part  of  the  contract  in  N.  Y.  159. 
the   manner  above  stated,  the  con- 


24  BY-LAWS.  [Chap.  2,  §20. 

the  land  in  which  it  exists,  or  does  business.  In  this  country 
they  must  be  consistent  with  the  constitution  of  the  United 
States,  and  the  acts  of  Congress  pursuant  thereto,  and  the 
constitution,  statutes  and  general  laws  of  the  state  in  which 
the  society  is  organized,  or  is  doing  business. 

A  member  is  not  bound  by  a  by-law  which  is  contrary  to 
law,  even  though  he  may  have  asseated  to  it. 

"Where  the  provisions  of  the  constitution  and  by-laws  of 
a  society  permit  a  contract  of  insurance  to  be  assigned,  or 
made  payable  to  a  stranger  who  has  no  insurable  interest  in 
the  life  of  a  member,  and  the  laws  of  the  state  in  which  the 
contract  is  executed,  hold  such  an  assignment,  or  designation 
of  beneliciary  to  be  void,  as  against  public  policy,  such  pro- 
visions are  inoperative  and  void.' 

By-laws  of  a  society,  which  forbid  a  member  to  work  at  his 
trade  at  such  prices  as  he  chooses  to  accept,  and  compel  him 
to  join  in  a  "  strike  "  by  punishing  him  for  refusing  to  do  so, 
are  void  as  against  public  policy.'^ 

It  is  not  illegal  for  workingmen  to  form  and  act  as  an 
association  for  the  purpose  of  protecting  themselves  against 
the  "  encroachments  "  of  their  employers,  and  to  agree,  in 
furtherance  of  such  object,  not  to  teach  others  their  trade 
unless  by  consent  of  the  society. 

The  court  says  :  "  In  the  relations  existing  between  labor 
and  capital,  the  attempt  by  co-operation,  on  the  one  side,  to 
increase  wages  by  diminishing  competition,  or,  on  the  other,  to 
increase  the  proiit  due  to  capital,  is  within  certain  limits  law- 
ful and  proper.  It  ceases  to  be  so  when  unlawful  coercion  is 
employed  to  control  the  freedom  of  the  individual  in  dispos- 
ing of  his  labor  or  capital.  It  is  not  easy  to  give  a  definition 
which  shall  include  every  form  of  such  coercion  ;  it  is  enough 
that  in  the  compact  before  us  there  is  no  evidence  of  any 
purpose  to  use  such  unlawful  means  in  any  form.'" 

A  by-law  of  a  societ}'-  imposed  a  penalty  for  violations  of 
its  by-laws,  one  of  which  forbade  any  of  its  members  to  work 
for  any  person  who  should  employ  non-members.  It  was 
held  that  the' by-law  was  not  illegal/ 

An  association  of  stevedores  of  a  port,  by  by-law,  fixed  rates 

■Price  V.  Supreme  Lodge,  etc.,  olent  Society,  6  Thompson  &  Cook, 
Texas,  4  S.  W.  Rep.  633.  N.  Y.  88. 

-Doyle  V.  Benevolent  Society,  3  'Snow  v.  Wheeler,  113  Mass.,  179. 
Hun  (N.  Y.)  361 ;  Farrer  v.  Close,  ^Commonwealth  v.  Hunt,  4  Met., 
L.  R.  4,  Q.  B.  602;  Doyle  v.  Benev-     (Mass.)   Ill;      but    see    People    v. 

Fischer,  14  Wend.,  (N.  Y.)  9. 


•Chap.  2,  §3.]  by-laws.  25 

.at  which  its  members  should  work,  and  penalties  for  the  vio- 
lation of  the  by-law,  to  be  paid  to  the  association. 

The  court  held  the  by-law  valid,  and  the  penalty  recover- 
able." 

One  of  the  by-laws  of  an  association  provided,  that  any 
member  who  should  bind  his  son  in  a  shop  wherfe  non-union 
men  were  employed,  should  be  lined,  and  it  was  held  to  be 
illegal." 

§21.  Same  subject  continvied.  The  statutes  of 
a  state,  which  apply  to  corporations  formed  for  purposes 
other  than  profit,  govern  incorporated  mutual  benefit  socie- 
ties, and,  when  these  statutes  provide  that  the  term  for  which 
■ofiicers  may  be  elected  shall  be  one  year,  neither  the  incor- 
porators, nor  the  trustees  first  elected,  are  authorized  to  adopt 
a  by-law  or  regulation  providing  that  they  shall  hold  office 
during  life.^ 

A  stock  exchange  may  make  membership  therein  subject 
to  the  rule,  that,  if  the  member  becomes  insolvent,  his  seat 
may  be  sold  for  the  benefit  of  his  creditors  among  the  other 
members  of  the  board.  Payments  of  the  proceeds  of  such 
sale  to  such  members  are  not  preferences,  void  by  the  bank- 
rupt law.* 

Where  the  scheme  of  a  society  was  the  annual  distribution 
by  lot  among  its  members  of  works  of  art  purchased  by  their 
subscriptions,  it  was  declared  to  be  a  lottery,  and  a  violation 
of  law.' 

By-laws  cannot  be  permitted  to  destroy  or  amend  the  ex- 
press provisions  of  a  contract  of  insurance,  without  the  con- 
sent of  the  assured.* 

It  has  been  held,  in  many  states,  that,  while  societies  may 
provide  methods  for  redressing  grievances  and  deciding 
controversies,  and  may  compel  members  to  resort  to  the  pre- 
scribed methods  before  invoking  the  power  of  the  courts,  it 
is   not  lawful  for  them  to  entirely  prohibit   members  from 

'Stevedorps'  Association  v.  Walsh,  ^Becker  v.  Farmers'  Mut.,  etc  ,  48 

2  Dalv,  (N.  Y.)  1.  Mich.,  610;    Ins.  Co.  v.  Connor,  17 

'Rigby  V.  Connol,  L.  R.,  14  Chan.  Pa.  St.,  130;    Ins.  Co.  v.  Harvey,  45 

Div.,  482-492.  N.  II  ,  292;    Ins.   Co.  v.   Butler,  34 

^State  V.  Standard  Life  Ass'n,  38  Me  ,   451 ;     Morrison    v.  Wisconsin 

•Ohio  St,  281.  OddFellows,  etc.,  59  Wis.,  162;    18 

«Hyde  v.  Woods,  94  U.  S.  523.  N.  W.  Rep.,  13;    Gundlach  v.  Ger- 

'The  Governors  of  Almshouse  N.  mania   Mechanics    Ass'n,  49   How. 

Y.  V.  The  American  Art-Union,  7  Pr.,  190;    Pulford   v.  Fire   Depart- 

J^.  Y.  228.  ment,  31  Mich.,  458. 


26  BY-LAWS.  [Chap.  1,  §22. 

suing  to  recover  benefits  accruing  to  them  under  the  by-law& 
of  the  society,  or  a  contract  of  insurance  issued  by  it.' 

A  by-law  of  a  society,  setting  aside  a  certain  fund  from 
which  a  certain  sum  is,  upon  tlie  death  of  a  member,  to  be 
paid  to  the  living  members  holding  numbers  just  above  and 
just  below  the  number  of  the  deceased  member,  is  illegal  a& 
being  in  the  nature  of  a  wagering  policy.'^ 

A  society  organized  as  a  corporation  under  the  laws  of  a 
state,  may  not  by  its  by-laws  subject  itself  or  its  members  ta 
the  jurisdiction  of  an  authority  existing  outside  of  the  state,  and 
beyond  the  control  of  its  laws. 

A  by-law  of  a  corporation  existing  under  the  laws  of  Mich- 
igan may  not  require  its  members  to  pay  assessments  levied  by 
a  supreme  lodge  incorporated  under  the  laws  of  Kentucky. 

The  Court  says  upon  the  subject : 

"  The  relator  is  not  liable  to  pay  the  assessment.  It  is  not 
competent  for  the  respondent  to  subject  itself,  or  its  members, 
to  a  foreign  authority  in  this  way.  There  is  no  law  of  the 
state  permitting  it,  nor  could  there  be  any  law  of  the  state 
which  would  subject  a  corporation  created  and  existing  under 
the  laws  of  this  state  to  the  jurisdiction  and  control  of  a  body 
existing  in  another  state,  and  in  no  manner  under  the  control 
of  our  law.  The  attempt  of  the  respondent  to  do  this  is  an 
attempt  to  set  aside  and  ignore  the  very  law  of  its  being.'" 

A  corporation  of  a  state  can  not  permit,  by  by-law,  a  foreign 
corporation  to  interfere  in  its  affairs,  nor  can  it  permit  its 
members  to  be  disfranchised  by  another  body  outside  of  it 
for  any  cause  or  in  any  manner.^ 

An  incorporated  medical  society  established  a  tariff  of  fees 
for  medical  services  to  be  performed  by  its  members,  lixed  a 
minimum  salary  to  be  received  by  any  member  who  should  be 
appointed  to  any  public  office  in  a  professional  capacity,  and 
adopted  a  by-law  declaring  that  it  should  be  dishonorable^ 
and  subject  him  to  expulsion,  for  any  member  to  accept  any 
appointment  at  a  less  sum  than  was  specified  therein.  The 
court  held  that  the  by-law  was  against  public  policy  and  void.' 

A  by-law  providing  that  no  member  of  the  society  should 
sell  a  gun-barrel  to   any  person  of  the  trade,  not  a  member 

^See  Action  on  Contract,  Chap.  xiv.  ers,  Mich:     28  N.   W.  Rep,  802; 

^The    Golden  Rule  v.  People  ex.  State  ex.  rel.   Graham  v.  Miller,  66 

rel,  118  111..  492;  9  N.  E.  Rep,  342  Iowa,  26:  23  N.  W.  Rep.  241. 

^Lamphere  v.  United  Workmen,  ^People  v.  Medical  Society,  etc.,. 

47  Mich..  429.  24  Barb.,  570. 

^Allunt  V.  High  Court  of  Forest- 


Chap.  2,  §22.]  by-laws.  2r 

residing  in  London,  etc.,  was  held  invalid,  as  being  in  re- 
straint of  trade.' 

Sec.  23.  Same  subject  continued.  A  by-law  of  a 
merchants'  exchange,  requiring  its  members  to  submit  their 
controversies  to  arbitration,  and  prohibiting  them  from  bring- 
ing suit  in  court  against  each  other  to  settle  their  claims,  has 
been  held  to  be  illegal." 

In  a  beneficial  society  known  as  "  Good  Samaritans,"  there 
was  a  by-law  providing  that,  when  a  member  should  for  any 
cause  be  expelled,  he  should  be  suspended  in  the  air  by  means- 
of  a  rope  fastened  around  the  waist.  This  ceremony  had 
often  been  peformed  upon  others  in  the  presence  of  a  certain 
member,  but  when  she  was  expelled,  she  resisted  to  the  extent 
of  her  ability.  The  rope  was,  however,  fastened  around  her 
waist,  and  an  attempt  was  made  to  draw  her  up  until  her  feet 
should  not  touch  the  floor,  when  she  fainted.  Those  who  had 
thus  attempted  to  hang  her  were  indicted,  and  convicted  of 
assault  and  battery. 

The  court  says:  "Rules  of  discipline  for  this  and  all  vol- 
untary associations  must  conform  to  the  laws.  If  the  act  of 
tying  this  woman  would  have  been  a  battery,  had  the  parties 
concerned  not  been  members  of  the  society  of  '  Good  Samari- 
tans,' it  is  not  the  less  a  battery  because  they  were  all  members 
of  that  humane  institution."  ' 

By-laws  or  regulations  are  properly  only  rules  for  future 
action.  Ex  post  facto  laws  are  no  more  lawful  for  corpora- 
tions than  for  states,  and  all  by-laws  contrary  to  the  general 
principles  of  the  common  law,  or  the  policy  of  the  state,  are 
void. 

The  effect  of  an  amendment  of  the  constitution  of  a  corpor- 
ation, which  before  contained  no  such  provision,  whereby  it 
was  declared  that  any  member  who  should  fail  to  pay  the- 
whole  of  his  dues  which  should  then  be  in  arrears,  or  any  in- 
debtedness to  thecor})oration,  on  or  before  a  day  named,  should^ 
from  and  after  that  day,  cease  absolutely  to  be  such  member, 
without  any  further  action  whatever  of  the  corporation  or  its 
trustees,  and  that  the  secretary  should  drop  the  names  of  all 
such  delinquent  persons  from  the  roll  of  members,  is  not  that 

'  Society  of  Gunmakers  v.    Fell,  Sweeney  v.  Beneficial    Society,  14 

Willes'  Reports  (Enii.)  384.  W.  N.  Cases  466-48«. 

«  State  V.  Union   Merchants'  Ex-  ^  y^ate  v.  Williams  et  al.  75  N.  C. 

change    2.  Mo.   App.  96;    State  v.  134. 
Chamber  of  Commerce,  20  Wis.  69 ; 


28  BY-LAWS.  [Chap.  2,  §23. 

of  a  regulation,  but  of  an  adjudication  on  existing  defaults,  an- 
alogous to  a  foreclosure  decree  tixing  a  short  term  of  payment; 
and  it  is  clearly  ex  jwst  facto,  in  that  it  enforces  anew  penalty 
beyond  those  existing  at  the  time  of  default,' 

A  by-law  made  in  pursuance  of  an  express  power  in  the 
charter  to  make  such  laws,  is  void,  if  contrary  to  the  general 
or  statute  laws  of  the  state. 

Sec.  23.  By-laws  must  be  consistent  with  the 
charter.  By-laws  of  a  society  inconsistent  with  the  pro- 
visions or  main  objects  of  its  charter  are  ultra  vires  and  void. 

"Where,  by  the  charter,  certain  classes  of  persons  are  to  be 
benelitted,  a  corporation  has  no  authority  to  provide  by  a  by- 
law for  other  benehciaries,  or  to  exclude  any  class  provided 
for  by  the  charter.' 

Where  the  charter  provides  that  the  devisees  of  members 
shall  be  among  those  who  may  take  the  benefit  fund,  restric- 
tions upon  the  power  or  right  of  the  member  to  make  a  will, 
are  inoperative  and  void,' 

Where  the  charter  prescribes  the  conditions  and  qualiiica- 
tions  of  membership  in  a  society,  no  additional  conditions  and 
qualilications  may  be  made  in  the  by-laws.* 

A  member  of  a  society  is  not  bound  by  a  by-law  which  is 
contrary  to  its  charter,  even  though  he  may  have  assented 
to  it.' 

The  controlling  consideration  in  determining  the  validity  of 
•corporate  by-laws,  is  the  nature  and  purpose  of  the  corpora- 
tion. If  a  by-law  is  clearly  alien  to  its  nature,  and  a  departure 
from  its  purpose,  it  will  be  held  idtra  vires,  and  void ;  if  not, 
and  it  is  consistent  with  the  general  laws  of  the  land,  it  will  be 
valid. 

No  rules  can  be  framed,  which  would  be  of  any  practical 
value  in  applying  this  test,  but  the  application  of  it  to  individ- 
ual cases  must  always  remain  a  matter  involving  the  exercise 
-of  sound  practical  judgment. 

Where  the  statute  under  which  a  corporation  was  organized, 
required,  a  majority  of  the  trustees  to  do  a  corporate  act,  and  a 

'  Pulford  V.  Fire  Department,  31  Chap.  xii. 

Mich,  459.  *  People    ex    rel.,    v.    Benevolent 

'^Legion  of  Honor  v.  Perry,  140  Society,  41  Mich.  67;  People  ex  rel., 

Mass.  580;  Kentucky  Masonic  etc,  v.  Benevolent  Society,  24   How.   Pr. 

v.  Miller,  13  Bush.  (Ky.)  489.  216. 

^  Rand  v.    Masonic    Mut.    Relief  'People  v.  Benevolent  Society,  24 

Ass'n.,  3   Mackey   (D.   C)  68;   See  How.   Pr.   (N.    Y.)  216;   People   ▼. 

Designation    of    Beneficancy,    post  Benevolent  Society,  41  Mich.  67, 


Chap.  2,  §24.]  by-laws.  29^ 

by-law  authorized  a  vacancy  in  the  office  of  trustee  to  be 
tilled  by  a  less  number  than  a  majority — it  was  held  that  the 
bylaw  was  contrary  to  the  charter  and  void.' 

Where  the  charter  of  a  society  provides  that,  on  non-pay- 
ment of  an  assessment,  the  officers  may  forfeit  the  policy,  the 
society  may,  by  by-law,  provide  that  such  non-payment  shall 
work  a  forfeiture,  in  which  case  no  action  of  the  officers  will 
be  necessary.'' 

Where  the  charter  of  a  society  limits  and  restricts  the  num- 
ber of  "  active  "  members  which  a  society  may  have  at  one- 
time, a  by-law  is  void,  which  provides  for  the  election  of  "con- 
tributing" members  in  the  same  manner  as  active  members,, 
after  the  active  list  is  tilled.' 

Where  the  charter  of  a  corporation,  provides  for  specitic 
assessments  to  pay  losses  and  expenses,  a  by-law  is  ultra  vires- 
and  void,  which  requires  the  members  to  pay  an  annual  deposit 
in  advance  each  year,  instead  of  assessments,  and  provides  that 
the  assessment  liability  of  members  shall  be  for  each  year  of 
the  term  of  the  contract,  equal  in  amount  to  the  annual  deposit,, 
but  in  no  case  shall  any  member  be  assessed  in  one  year  for  an 
amount  exceeding  the  annual  deposit.* 

The  charter  of  a  religious  society  authorized  the  making  of 
by-laws  requisite  for  the  good  government  and  support  of  the 
church,  and  provided  that  no  persons  should  have  a  vote  in  the 
election  of  its  minister,  except  those  who  had  been  regularly 
admitted,  and  had  been  members  of  such  church,  twelve  months^ 
preceding  the  election.  A  by-law  was  enacted,  providing 
that  a  member  of  the  church,  whose  pew  rent  had  been  in  arrears 
for  a  longer  time  than  one  year  prior  to  the  election,  should 
not  be  entitled  to  vote.  This  by-law  was  held  to  be  valid  and 
not  contradictory  to  the  act  of  incorporation.  The  court  says;; 
"  JS[o  person  is  excluded  from  voting,  unless  he  is  in  default  in 
a  matter  essential  to  the  support  of  the  church:  and  he  may 
reinstate  himself  in  his  privilege  by  paying  his  debt.  Noth- 
ing is  more  manifestly  for  the  good  of  the  cliurch  than  this  by- 
law."^ 

§  24.  By-laws  of  unincorporated  society  must 
be  consistent  with  its  constitution.  The  constitution 
of  an  unincorporated  society,  is,  as  has  been  said,  the  funda- 

'State  V.  Curtis,  9  Nev.  325,  "'State    ex.    rel.    v.    Monitor    etc. 

"Equitable    etc.,     v.     McLennon,  Ass'n.  42  Ohio  St.  555. 

Tenn.  6  Ins.  L.  J.  124-  *Commonwealth  v.   Cain  et.  nl.  5- 

^Diligent  Fire    Co.  v.   Common-  S.  &  R.  (Pa.)  509. 
wealth,  75  Pa.  St.  291. 


:30  BY-LAWS.  [Chap.  2,  §25. 

rnental  law  of  the  society;  and  it  follows,  that,  in  case  of  a  con- 
flict between  the  constitution  and  the  by-laws,  the  constitution 
must  prevail.' 

§  35.  By-laws  of  unincorporated  society  must 
not  be  illegal.  In  respect  to  the  by-laws  of  an  unincorpor- 
ated voluntary  society,  the  court  has  no  visitorial  power,  and 
may  not  determine  whether  they  are  reasonable  or  unreasonable ; 
and  the  only  question  which  it  may  examine,  is  whether  they 
have  been  adopted  in  tlie  way  which  has  been  agreed  upon  by 
the  members  of  the  society.  The  court  regards  the  members 
of  such  societies  as  standing,  to  some  extent  at  least,  in  the 
relation  of  partners,  and  permits  them  to  make  their  own 
compacts,  when  the  provisions  of  such  compacts  are  not  con- 
trary to  the  law.  A  member  has  a  right  to  withdraw  from 
the  society  at  any  time,  should  he  deem  its  by-laws  unreasona- 
ble and  oppressive,  but  so  long  as  he  remains  in  the  society  he 
is  bound  by  its  laws.  The  theory  of  a  voluntary  society  is 
founded  upon  the  idea  that  men  shall  come  together  of  their 
■own  free  will  and  accord,  and  be  bound  by  such  laws  as  shall 
be  passed  in  the  manner  agreed  upon. 

There  are  cases  in  the  books  where  by-laws  of  an  unincor- 
porated society  have  been  declared  to  be  just  and  reasonable, 
but  there  are  none,  it  is  believed,  where  the  by-laws  of  such 
societies  have  been  held  to  be  unreasonable  and  void.* 

§  36.  By-Laws  of  incorporated  society  must  be 
reasonable  and  necessary.  But  it  is  a  governing  rule 
with  regard  to  corporations,  that  their  by-laws  must  be  reason- 
able, and  all  which  are  vexatious,  unequal,  oppressive,  or  man- 
ifestly detrimental  to  the  interests  of  the  corporation,  are 
•void. 

The  power  of  making  by-laws  binding  upon  all  the  mem- 
bers of  a  corporation,  whether  it  reside  in  the  majority  of  the 
body  at  large,  or  those  present  at  a  corporate  meeting,  or  be 
confined  by  charter  to  a  select  class,  is  in  trust  for  the  benefit 
of  the  whole,  and  must  therefore  be  exercised  with  discretion.' 

In  Coleman  v.  Knights  of  Honor,  18  Mo,  App.  189-194,  the 
court  intimates  that  a  member  of  an  incorporated  society  may 
not  complain  that  a  by-law  duly  passed  by  the  society  is  un- 

'Powell    V.    Abbott,     9    "Weekly  Ga.  340;   Grosvenor  v.  United,   118 

Notes  of  Cases  231.  Mass.  78. 

*Kehlenbeck  v.  Norddeutcher  ^  Ansrell  &  Ames  on  Corp.  at  Sec- 
Bund,  10  Daly  (N.  Y.)  447 ;  Har-  tion  347 ;  Cartan  v.  Fr.  Mathews 
rington  v.  Workingmen's  Society,  70  etc.  Soc,  3  Daly  (N.  Y.)  20. 


OhAP.  2,  §26.]  BY-LAWS.  31 

reasonable,  but  this  is  clearly  against  both  principle  and  auth- 
ority. 

In  People  v.  Board  of  Trade,  80  111.,  134,  the  doctrine  is 
laid  down  that  a  court  will  not  interfere  with  the  enforcement 
of  the  bv-laws  of  a  society  incorporated  for  the  purposes  of  re- 
ligion, morality,  benevolence  or  amusement,  but  this  case  is 
neither  in  harmony  with  the  general  current  of  authority,  nor 
with  prior  and  subsequent  decisions  of  the  Supreme  Court  of 
Illinois. 

Where  an  unincorporated  society  becomes  incorporated  under 
a  general  law,  the  provisions  of  its  constitution  and  by-laws 
become  subject  to  the  rules  of  law  governing  the  provisions  of 
the  constitution  and  by-laws  of  corporations.  While  a  society 
remains  unincorporated  it  may  make  such  rules  and  regula- 
tions as  may  seem  proper  for  the  discipline  of  its  members, 
but  as  soon  as  it  becomes  incorporated,  it  surrenders  this 
power,  and  becomes  subject  to  the  visitorial  power  of  the 
courts.  In  such  cases,  therefore,  provisions  of  the  constitution 
and  by-laws  which  were  binding  upon  the  members  so  long  as 
the  society  remained  unincorporated,  may  become  null  and 
void,  by  the  very  fact  of  incorporation.  The  court  will,  upon 
proper  application,  determine  whether  such  provisions  are 
reasonable  and  necessary  to  effect  the  object  for  which  the 
society  was  incorporated.' 

Whether  a  by-law  is  reasonable  and  consistent  with  the  law, 
is  a  question  solely  for  the  court  to  determine.^ 

A  by-law  will  not  be  set  aside  as  unreasonable  if  there  is 
^ny  equipoise  of  opinion  in  the  matter;  its  unreasonableness 
must  be  demonstrably  shown." 

A  declaration  for  the  penalty  of  a  by-law  need  not  aver  that 
such  by-law  was  necessary." 

A  by-law  is  reasonable  which  provides  that  a  member  shall 
be  entitled  to  relief,  in  case  of  disability  or  sickness^  only  from 
the  date  of  his  application  for  such  relief,  and  not  from  the 
time  such  sickness  or  disability  occurred.  While  in  individual 
•cases  such  a  by-law  may  work  a  hardship,  on  the  other  hand, 
it  is  necessary  for  the  society  to  make  fixed  and  certain  rules 
to  prevent  imposition  on  the  society,  either  by  feigned  or 
trivial  sickness,  or  by  disability  produced  by  causes  not  entit- 

'  State  V.  Medical  Society,  38  Ga.  '  State  v.   Union  Merchant's  Ex- 

608.  change,  2  Mo.  App.  96. 

"  People  V.  Throop,  12  Wend.  186 ;  *  Coates  v.  Mayor  etc.  1  Cowen  58-i. 
see  10  Wend.  100,  and  5  Cowen  465. 


32  BY-LAWS.  [Chap.  2,  §27. 

ling  the  claimant  to  relief.  It  is  necessary  that  the  society 
should  have  information  of  the  state  of  the  applicant,  and  have 
it  in  its  power  to  visit  him,  and  inspect  personally  his  situa- 
tion.' 

A  by-law  providing  that  the  officers  of  the  society  shall 
withhold  beneiits  when  intemperance,  debauchery,  etc.,  are  the 
cause  of  sickness,  and  providing  that  when  death  is  caused  by 
intemperate  use  of  alcoholic  liquors,  or  by  debauchery,  the 
beneficiary  shall  not  be  entitled  to  the  fund,  is  reasonable 
and  valid.* 

Such  a  regulation  is  not  a  determination  of  the  right  of  the 
member  or  his  beneficiary.  A  trial  of  the  claim  may  be  had 
to  determine  these  rights  under  the  by-law, 

A  society  may,  by  by-law,  prohibit  its  members  from  indul- 
gence in  vices  which  multiply  disease  and  death  among  them, 
and  thus  diminish  its  general  fund,  and  increase  the  burden  of 
assessments  upon  contributing  members.  Such  provisions  are 
not  merely  to  regulate  behavior,  but  strike  at  acts  which  will 
result  in  injury  to  the  society.  Where  sick  benefits  are 
merely  lost  by  reason  of  intemperance,  membership  remains 
in  the  society. 

A  by-law  providing  that  sick  benefits  shall  be  paid  only 
upon  presentation  of  a  physician's  certificate  of  the  character 
and  duration  of  the  illness,  is  reasonable,  as  is  also  a  by-law 
providing  that  no  benefits  shall  be  paid  unless  the  sickness  is 
reported  "to  the  "  sick  committee  "  for  investigation  and  report 
to  the  society,^ 

§  27.  Same  subject  continued.  A  by-law  of  an 
incorporated  society  provided  that  any  member  who  should 
be  three  months  or  more  in  arrears  for  dues,  should  be  deprived 
of  benefits  for  three  months  after  liquidating  the  same.  The 
Court  held,  that  this  by-law  was  unreasonable  and  void,  and 
in  discussing  the  question  says:  "Is  the  by-law  referred  to 
unreasonable?  I  think  it  is  most  decidedly. so.  If  it  provided 
that  delinquent  members  should  be  deprived  of  benefits  during 
their  delinquency,  it  would  be  otherwise;  but  this  by-law  sub- 
jects the  member  to  a  quasi  penalty  after  the  payment  of  his 
dues  and  the  performance  of  his  duty,  and  for  a  prospective 
period  of  three  months.     *     *     *     It  is  not  only  unreason - 

'  3  Watts  &  Sargents  (Pa.)  218.  ^  Harrington  v.  Benevolent  Society, 

» St.  Mary's  Ben.  Soc.  v.  Burford,  70  Ga.  340 ;  Van  Pouche  v.  St.  Vin- 

Admr.,  70  Pa.  St.   331 ;    Harrington  cent  de  Paul  Society,  Mich.  2  N.  W. 

V.  Benevolent  Society,  70  Ga.  840.  Rep.  863- 


-ClIAP.  2,  §27.]  BY-LAWS.  33 

able,  but  oppressive  and  detrimental  to  the  interests  of  the  cor- 
poration, and  one  which,  being  fully  understood,  it  seems, 
would  prevent  persons  from  becoming  members  of  the 
society." ' 

A  by-law  of  an  incorporated  society  declared  that  "  vilify- 
ing any  of  its  members  "  was  a  crime  against  the  societ}-,  and 
provided  that  for  such  vililication  a  member  might  be  removed 
from  office,  lined,  or  expelled  from  the  society.  The  object  of 
the  society  was  for  the  relief  of  members  in  case  of  sickness 
and  misfortune,  and  to  assist  distressed  Irishmen  emigrating 
to  the  United  States. 

The  Court  held  the  by-law  unreasonable  and  unnecessary  for 
the  accomplishment  of  the  end  in  view,  and  declared  it  void. 

The  Court,  in  the  opinion  says:  "Every  man,  who  becomes 
a  member,  looks  to  the  charter;  in  that  he  puts  his  faith,  and 
not  in  the  nncertain  will  of  the  majority  of  the  members. 
The  offense  of  vilifying  a  member,  or  a  private  quarrel,  is 
totally  unconnected  with  the  affairs  of  the  society,  and  there- 
fore its  punishment  cannot  be  necessary  for  the  good  govern- 
ment of  the  corporation."  '^ 

In  People  ex  rel.  v.  The  Medical  Society  etc.  24  Barb.  571, 
the  court  held  that  a  society  chartered  merely  for  the  promo- 
tion of  medical  science  had  no  right  to  decide  what  fees  its 
members  should  charge  for  their  professional  services,  and  to 
expel  a  member  who  had  disregarded  such  a  regulation. 

The  Court  says:  "  Can  it  be  said  with  any  plausibilty  that 
the  establishment  of  a  tariff  of  prices  for  medical  services  was 
a  legitimate  object  of  the  creation  of  the  corporation,  or  tliat 
it  was  necessary,  or  in  any  degree  contributed  to  the  accom- 
plishment of  the  purposes  or  objects  for  which  the  law  author- 
ized the  corporation?" 

The  charter  of  the  Board  of  Trade  of  Chicago  provides  that 
said  corporation  shall  have  the  right  to  admit  or  expel  such 
persons  as  it  may  see  fit,  in  nlanner  to  be  prescribed  by  the 
rules,  regulations  or  by-laws  thereof. 

Under  this  power  it  adopted  the  following  by-law: 

"  In  case  any  member  of  the  association,  having  made  any 
business  contract,  either  written  or  verbal,  and  failing  to  com- 
ply promptly  with  the  terms  of  such  contract,  shall,  upon  the 
representation  of  an  aggrieved  member  to  the  board  of  direc- 
tors, accompanied  with  satisfactory  evidence  of  the  facts,  be 
by  them  suspended  from  all  privileges  of  membership  in  the 

'  Cartan  V.  Father  Mathew  United  -Commonwealth  v.  St.  Patrick's 
Ben.  Soc,  3  Daly  (N.  Y)  20.  Soc.  2  Binney  (Pa.)  441. 

8 


34  i:v-r,A\vs.  [Chap.  2,  §27. 

association  until  such  contract  is  equitable  or  satisfactorily 
arrano^ed  or  settled,  when  he  may  be  restored  to  member- 
ship," etc. 

The  court  held  this  by-law  to  be  reasonable,  and  says:  "  It 
(the  charter)  gives  the  power  of  expulsion,  and  under  that 
power  the  corporation  has  adopted  this  by-law,  providing  that 
if  a  member  fails  to  comply  with  a  business  contract  made 
with  another  member,  he  shall  be  expelled. 

This  is  somewhat  different  from  the  adjustment  of  disputes, 
which  are  properly  referable  to  the  committees  of  reference 
and  arbitration.  It  applies  to  cases  of  non-compliance  with 
contracts  about  which  there  is  no  dispute  necessary  to  be  re- 
ferred to  one  of  these  committees,  as  there  was  none  in  the 
present  case.  It  certainly  cannot  l)e  said  that  this  rule  was 
not  germane  to  the  purposes  for  which  the  corporation  was 
created.  In  our  judgment,  though  it  might  sometimes  operate 
harshly,  it  is  well  adapted  to  secure  the  object  we  have  above 
named,  and  preserve  the  high  character  and  credit  of  the  board." 

A  by-law  of  a  chamber  of  commerce  prohibiting  its  mem- 
bers from  "  gathering  in  any  public  place  in  the  vicinity  of 
the  Exchange  Koom  "  and  "  forming  a  market  "  for  the 
purpose  of  making  any  trade  or  contract  for  the  future  de- 
livery of  grain  or  provisions,  before  the  time  fixed  for  opening 
the  Exchange  Room  for  general  trading,  or  after  the  time 
fixed  for  closing  the  same,  daily,  is  not  unreasonable,  or  an 
unlawful  restraint  upon  trade.' 

Under  the  peculiar  facts  surrounding  the  organization  and 
maintenance  of  the  Baltimore  and  Ohio  Employes'  Relief 
Association,  it  was  held  that  a  clause  of  the  constitution  of 
the  association,  providing  that  before  the  association  will  pay 
the  beneficiary  of  the  member  killed  the  amount  of  benefits 
due,  the  person  legally  entitled  to  damages  for  his  death  shall 
release  the  Baltimore  and  Ohio  Rail  Road  Company  from  all 
claims  for  damages,  waslield'not  to  be  so  unreasonable  that  a 
court  could  declare  it  void.^ 

A  by-law  of  an  incorporated  benefit  society,  providing  that 
any  member  who  shall  enlist  as  a  soldier,  or  enter  on  board 
any  vessel  as  a  seaman  or  mariner,  shall  thenceforth  lose  his 
membership,  is  valid  and  reasonable,  in  view  of  the  purposes 
of  the  organization,  and  "  is  not  forbidden  by  any  principle  of 
public  policy."  ^ 

^  Qtateex  rel.y.  Milwaukee  Cham-  'Franklin  v.  Commonwealth,    10 

t)er  etc.  47  Wis.  670.  Barr  (Pa.)  359;  ^ee  ''Actions  onby- 

-  Fuller  V.   B.   cV  O.  Relief  Assn.,  laws    for  benefits." 
Md.  10  Atl.  Rep.  237. 


CHAPTER  III. 


Membership.    Part  I. 


Sfc    ^9  f  ^d™ission  into  incorporated  societies. 

Sec.  30.  Admission  into  unincorporated  societies. 

Sec.  31.  Election  to  menabership. 

Sec.  32.  Who  are  members  of  a  mutual  benefit  society. 

Sec.  33.  Membership  in  religious  corporations. 

Sec  34.  Expulsion,  suspension  and  amotion. 

Sec  35.  Power  of  amotion  in  incorporated  societj^ 

Sec.  28     Aclmissioii  into  incorporated  societies. 

As  the  power  of  admitting  new  members  is  incidental  to  an 
incorporated  society,  it  is  not  necessary  that  such  power  be 
expressly  conferred  by  the  statute  under  which  it  is  organ- 
ized, or  by  its  charter. 

"When  the  organic  law  of  the  society,  and  its  charter  are 
silent  as  to  its  powers  in  this  regard,  the  society  may  admit  to 
membership  any  number  of  persons,  but  when  such  law,  or 
charter  limits  and  restricts  the  power  of  admission  to  a  partic- 
ular number,  it  erects  a  barrier  beyond  which  the  society  may 
not  pass. 

Where  the  charter  of  a  society  provides  that  it  shall  consist 
of  not  more  than  one  hundred  active  members,  and  may  bestow 
honorary  membership  on  active  members  under  such  regula- 
tions as  may  be  prescribed,  the  society  may  not  create  honor- 
ary members,  except  from  active  members.  And  when,  in 
such  case,  the  active  membership  has  reached  one  hundred, 
the  election  of  "  contributing"  members  in  the  same  manner 
as  active  members,  is  void  as  evasive  of,  and  conflicting  with  its 
charter,  even  though  the  privileges  of  such  "  contributing  " 
members  be  greatly  limited.  ' 

Where  the  statute  of  a  state,  under  which  a  mutual  benefit 
society  is  organized,  requires  that  all  members  shall  be  citizens 
of  that  state,  and,  of  course,  of  the  United  States,  a  clause  in 
the  charter  of  such  society,  authorizing  persons  wlio  have  de- 
clared their  intention  to  become  citizens  of  the  United  States 
to  become  members,  is  illegal.  * 

'  Diligent  Fire  Co.  v.  Common-  -  Alsatian  Beneficial  Society,  35 
wealth,  75  Pa.  St.  291.  Pa.  St.  79. 

(35) 


36  MEMBERSHIP.  [ClIAl'.  3,  §20, 

It  may  be  stated,  as  a  general  rule,  that  when  a  person  ha& 
applied  for  membership  in  an  incorporated  society,  and  has  been 
refused  admission,  he  is  without  remedy  to  compel  the  society 
to  admit  him. 

It  would  be  manifestly  unjust  and  destructive  of  the  har- 
mony and  efficiency  of  such  societies,  to  compel  them  to  admit 
persons  into  the  society  merely  because  they  possessed  the 
qualifications  set  forth  in  the  organic  law.  These  qualifica- 
tions are  necessarily  expressed  in  very  general  terms,  and 
do  not  take  into  consideration  many  elements  of  character 
which  do,  or  do  not,  make  persons  desirable  associates  and 
members.  The  succession  of  membership  in  the  corporation^ 
is  to  be  kept  up  by  the  election  of  proper  members  by  those- 
already  admitted  to  membership,  and,  to  the  members  clothed 
with  this  power  and  duty,  the  law  gives  the  right  to  judge  of 
the  qualification  necessary  for  membership.  Not  only  are  the 
relations  between  the  society  and  its  members  voluntary  on  the 
part  of  the  latter,  but  as  a  corollary  to  this  principle,  no  persom 
is  required  to  become  a  member.  Having  never  been  admitted 
to  the  right  of  enjoyment  of  the  property  of  the  society,  or  to 
any  interest  therein,  and  being  under  no  obligation  to  take 
upon  himself  the  privileges  and  duties  of  membership,  the- 
excluded  applicant  has  received  no  legal  injury,  and  the  courts 
have  no  jurisdiction  to  interfere,  even  though  the  exclusion 
seem  to  be  the  result  of  malice  and  arbitrary  injustice.  This 
power  to  determine  whether  an  applicant  possesses  the  qualifi- 
cations necessary  to  entitle  him  to  meml)ership  in  the  society, 
is  judicial  in  its  nature;  and  in  determining  this  question,  the 
society  affects  no  civil  or  property  right  of  the  applicant; 
there  is  nothing,  therefore,  to  invoke  the  visitorial  power  of  the 
courts  over  the  society. 

§  39.  Same  subject.  This  rule  is  not  changed  by 
the  fact  that  the  ,  applicant  claims  to  have  been  a  member 
of  a  society  with  similar  objects  and  a  similar  name. 

A  man  who  claims  to  be  a  Mason  may  not  invoke  the  aid 
of  a  court  to  compel  an  incorporated  society  of  Masons  to 
admit  him  to  membership  in  that  society.  The  courts  will 
not  undertake  to  determine,  as  to  this  person,  or  that,  whether 
he  is  a  Mason,  an  Odd  Fellow  or  a  member  of  any  organiza- 
tion, and  whether,  as  such,  he  ought  to  be  admitted  to  fellow- 
ship with  an  incorporated  society  of  Masons,  Odd  Fellows  etc- 
These  matters  must  be  judicially  determined  by  the  society 
itself.     This  power  of  judicial  determination  of  the  qualifica- 


«ChAP.  3,  §29.]  MEMBERSHIP.  37 

tions  of  an  applicant  for  membership,  is  inherent  in  the  society, 
■SLud  exists  whether  recognized  in  its  charter,  or  not.' 

But  where  the  law  provides  for  the  formation  of  a  society 
for  objects  of  public  benefit,  and  makes  it  the  duty  of  a  cer- 
tain class  of  citizens  to  become  members  of  the  society,  in 
order  to  enjoy  certain  privileges  granted  by  the  laws  of  the 
land,  an  entirely  different  case  is  presented. 

It  is  evident  that  such  a  society  is  not  voluntary.  A  duty  is 
imposed,  and  a  privilege  conferred  upon  a  certain  class  of  citi- 
zens, and  the  visitorial  power  of  the  court  may  be  invoked  to 
inquire  into  the  exclusion  of  an  applicant  from  the  rights  and 
'duties  of  membership. 

When  a  party  having  a  clear  presumptive  title  to  its  enjoy- 
ment, applies  to  be  admitted  to  the  exercise  of  a  franchise  in 
:6uch  a  society,  the  application  should  not  be  denied,  unless  the 
right  of  immediate  expulsion,  for  causes  then  subsisting,  be 
plain  and  unquestioned.  The  exclusion  of  such  an  applicant 
can  be  justified  only  by  facts  repelling  the  presumption  that 
he  was  qualilied  for  admission,  or  by  extraneous  facts,  showing 
tliat,  if  his  application  had  been  granted,  there  were  then  sub- 
sisting causes,  making  "a  clear  case"  for  immediate  expul- 
fiion.^ 

Wliere  the  law  made  it  the  duty  of  the  physicians  of  each 
county  in  the  State  to  form  an  incorporated  medical  society 
for  that  county,  and  provided  that  any  physician  who  should 
not  become  a  member  of  such  society  in  his  county,  should 
forfeit  his  license,  and  become  subject  to  the  disabilities  of  un- 
licensed physicians,  it  was  held  that  a  licensed  physician,  hav- 
ing the  qualifications  prescribed  by  the  by-laws,  might  proceed 
by  mandamus  to  compel  the  society  to  admit  him  t$  member- 
ship, upon  its  refusal  to  do  so.  In  the  same  case  it  was  lield 
that  a  licensed  physician,  having  the  prescribed  qualifications, 
could  not  be  excluded  from  the  franchise,  on  the  ground  that, 
at  a  period  antecedent  to  his  application,  he  had  advertised  in 
the  newspapers  in  a  manner  contrary  to  the  conventional  rules 
of  the  society.  As  he  was  not,  at  the  time  of  the  advertise- 
ment, a  member  of  the  society,  he  did  not  violate  its  law. 
•*'  Where  there  is  no  law,  there  is  no  transgression." 

The  Court  says:  "  Those  who  were  members  of  the  society, 
could  not  lawfully  be  expelled  for  antecedent  deviation  from 

'  State  V.  Odd  Fellows  etc.  8  Mo.  Paine  1  Hill  665;  People  v.  Medical 
App.  148.  Society,  32  N.  Y.  187. 

^  Bagg's  case  11  Coke  99 ;  Ex  parte 


38  MEMBERSHIP.  [CilAP.  3,  §30.. 

the  code.  Much  less  could  such  deviation  be  alleged,  as  cause- 
for  exclusion  against  one  who  never  agreed  to  be  bound  by  it,, 
and  as  to  whom  it  was  not  merely  an  inoperative,  but  an  un- 
known law." ' 

§  30.    Admission  into  unincorporated  societies. 

Unincorporated  voluntary  societies  come  into  existence  by 
mutual  agreement  of  the  persons  forming  it,  and  the  privilege 
of  membership  is  not  given  by  statute,  or  derived  through  pre- 
scription, but  is  created  and  conferred  by  the  organization 
itself.  The  law  can  not  compel  such  a  society  to  admit  an  in- 
dividual to  membership,  and  a  person  who  has  applied  for  ad- 
mission and  been  excluded,  is  utterly  without  remedy  at  law,, 
however  arbitrary  and  unjust  he  may  regard  such  exclusion. 
Such  societies  may  prescribe  the  conditions  upon  which  per- 
sons may  be  admitted  to  membership,  and  they  are  the  exclu- 
sive judges  as  to  the  existence  of  such  conditions. 

The  right  of  admission  to  membership  is  voluntary  and  mu- 
tual between  the  society  and  individuals  desiring  to  become 
members. 

No  one  can  be  compelled  to  join  the  society,  or  remain  a 
member,  against  his  wish,  nor  can  the  society  be  compelled  to 
admit  a  person  against  its  will.  This  principle  is  inherent  in 
every  voluntary  society. 

A  person  may  become  a  member  of  an  unincorporated  volun- 
tary society  by  paying  in  the  prescribed  amount  of  money,  and  by 
acting,  and  being  treated  and  considered  as  a  member,  without 
signing  the  constitution,  although  the  constitution  provides 
that  any  person  wishing  to  become  a  member  shall  sign  it,  if 
he  is  elected  to  membership.^ 

§31.  Election  to  membership.  If  there  be  no  form 
prescribed  for  the  election,  every  candidate  must  be  proposed 
singly.  If  the  names  of  more  than  one  be  set  down  in  a  list, 
and  the  election  proposed  to  be  made  of  the  whole  list  by  a 
single  vote,  such  election  is  altogether  void,  although  the 
names  have  been  repeatedly  read  over,  and  an  offer  made  to 
strike  out  any  to  wdiich  an  objection  should  be  made,  and  not- 
withstanding the  election  was  by  the  unanimous  consent  of  the 
entire  body.  For,  it  may  be  presumed  that,  instead  of  using 
his  judgment  as  to  the  propriety  of  admitting  an  individual, 

■  People  V.  Medical  Society,  32  N.        '  Tyrrell  et  al  v.  Washburn  et  al,  6- 
Y.  187;    See  Gay  v.  Farmers'  Mu-    Allen  (88  Mass.)  466. 
tual,  etc.,  51  Mich.  245. 


Chap.  3,  §32.]  membership.  39 

which  he  would  do  in  case  thev  were  separately  proposed,  each 
member,  desirous  of  obtaining  the  admission  of  some  one  in 
particular,  may  compromise  his  opinion  as  to  the  others,  and 
thus,  persons  may  be  introduced  who  would  otherwise  have 
been  rejected.' 

If  a  person  procure  his  election  and  obtain  membership  in  a 
mutual  benefit  society  by  false  representations  and  suppression 
of  facts  concerning  his  state  of  health  at  the  time  of  his  applica- 
tion, his  admission  to  membership  is  null,  and  he  may  be 
expelled.' 

A  by-law  of  an  incorporated  society  provided  that  the  object 
of  a  special  meeting  should  be  stated  in  the  call.  Another  by- 
law provided  that  a  new  member  must  be  approved  by  a  vote 
of  the  society.  A  warrant  which  called  a  special  meeting  of 
the  society,  contained  no  article  for  the  admission  of  new 
members,  but  contained  the  article:  "To  transact  any  other 
business  that  may  legally  come  before  said  meeting."  At  this 
called  meeting,  several  persons  were  admitted  to  membership, 
and  permitted  to  vote.  It  was  held  that  the  election  of  such 
persons  to  membership  was  invalid.' 

§  32.  Who  are  iiieiiibers  of  a  inutiial  benefit 
society.  The  members  of  a  society  incorporated  for  the 
mutual  protection  and  relief  of  its  members,  and  for  the  pay- 
ment of  stipulated  sums  of  money  to  tlie  family  or  heirs  of 
deceased  members,  are  those  mutually  engaged  in  promoting 
the  purposes  of  the  organization,  and  who,  by  virtue  of  tlieir 
relation  to  the  corporation,  are  entitled  to  the  mutual  protec- 
tion and  relief  provided,  (_»r  whose  family  or  heirs  are,  in  case 
of  death,  entitled  to  the  speciiic  relief  provided  for  them. 

The  members  of  such  a  corporation  are  the  elective  and  con- 
trolling body,  authorized  to  elect  trustees  and  other  proper 
officers,  and  prescribe  regulations  for  the  government  of  the 
same.^ 

Membership  in  a  mutual  benefitsociety  is  frequently  limited 
to  the  members  of  certain  subordinate  organizations  and  is,  by 
the  by-laws,  made  to  de]")end  upon  tlie  continuance  of  member- 
ship in  such  organizations.  When  such  is  the  case,  a  member 
who  ceases  to  be  a  member  of  such  organization,  also  ceases  to 
be  a   member  of  tlie  mutual  Ijenetit  society.     The  fact  that, 

'■  An^ell  and  Ames  on  Corp.,  at  ^  Grav  v.  Christian  Society,  137 
Section  126  Mass.,  329. 

2  Morel  V.  La  Soccitii,  etc.,  13  *  State  v.  Standard  Life  Assn.,  38 
Lower  Canada  Jurist,  1.  Ohio  St.,  281. 


40  MEMBERSHIP.  [ChAP.  3,  §33. 

after  the  withdrawal  of  the  member  from  sucli  organization, 
the  society  continues  to  carry  his  name  on  the  roll  of  member- 
ship, to  recognize  him  as  a  member,  and  to  lew  and  collect 
assessments  from  him,  gives  him  no  rights  against  the  society. 
Such  acts  on  the  part  of  the  society  do  not  operate  in  the 
nature  of  an  estoppel,  for  the  by-law  setting  forth  the  qualiiica- 
tion  of  membership,  is  as  binding  upon  the  member  as  upon  the 
society,  and,  in  such  a  case,  the  by-law  declares  that  he  is  no 
longer  a  member.' 

§  33.    Membership  in    religions    corporations. 

A  right  as  a  corporator  in  a  religious  society  is  obtained  by  a 
stated  attendance  on  divine  worship  therein,  and  contributing 
to  its  support  by  renting  a  pew,  or  by  some  other  mode  usual 
in  the  congregation.  Such  a  right  cannot  be  derived  by  de- 
scent from  the  founders  of  the  society,  nor  from  the  former  con- 
tributors to,  or  worshipers  in  the  same. 

The  association  between  a  religious  incorporation  and  its  in- 
corporators is  voluntary  on  the  part  of  the  latter,  and  is  dis- 
solved by  their  withdrawing  from  attendance  on  its  worship, 
omitting  to  contribute  to  its  support,  and  uniting  in  the  estab- 
lishment of  another  like  incorporation.  Aliens  may  be  cor- 
porators and  trustees  in  a  religious  corporation.' 

Membership  in  a  church,  however,  is  to  be  distinguished 
from  membership  in  a  religious  corporation.  The  church  is 
an  unincorporated  voluntary  society,  having  power  to  adopt  its 
own  rules  for  admission.  It  is  entirely  independent  of  the 
religious  corporation,  and  a  person  may,  by  stated  attendance 
at  public  worship,  and  contributing  to  its  support,  become  a 
member  of  the  religious  corporation,  without  becoming  a  mem- 
ber of  the  church,  for  whose  wants  the  corporation  provides. 

This  distinction  between  membership  in  a  religious  corpora- 
tion and  membership  in  a  church  whose  wants  are  supplied  by 
the  corporation,  is  an  important  one,  and  must  be  kept  in  view 
in  determining  the  respective  rights  of  membership. 

§  34.  Expulsion,  suspension,  amotion.  Expul- 
sion is  the  act  of  depriving  a  member  of  a  society  of  his  right 
of  membership  therein,  by  the  vote  of  such  society,  for  some 
violation  of  his  duty  as  such,  or  for  some  oit'ense  which  ren- 
ders him   unworthy  longer  to  remain  a  member  of  the  same. 

'  Burbank  v.  Boston  Police  Relief  ^  Cammeyer  v.    United     German 

Association,  144  Mass.,  484;  Spring-  Churches,  2   Sand.  Ch.    (N.  Y.)  186; 

meier  v.  Benevolent  Association,  5  People  v.  Tuthill,  31  N.  Y.  550. 
Cin.  Law  Bull.,  516. 


€hAP.  3,  §34.]  MEMBERSHIP.  41 

In  an  incorporated  society  there  is  a  distinction  Ijetween 
what  is  called  amotion,  or  the  right  to  remove  an  officer,  which 
is  a  power  inherent  in  every  corporation,  and  disfrancJdse- 
rnent. 

The  former  may  be  exercised  without  interfering  with  the 
franchise,  as  the  officer,  when  removed,  still  continues  a  mem- 
ber; but  disfranchisement  is  an  actual  expulsion  of  the  mem- 
ber from  the  body,  and  the  taking  away  of  his  franchise.  This 
distinction  is  not  generally  regarded  in  the  books,  and  the 
term  "  amotion  "  is  frequently  used  as  a  synonym  for  expulsion. 

It  is  well,  however,  in  view  of  the  increasing  importance  of 
the  subject  of  expulsion  from  voluntary  societies,  to  preserve 
:and  recoo-nize  the  distinction  as  laid  down. 

Suspension  is  a  temporary  expulsion,  and  the  law  regarding 
the  suspension  of  members  from  their  privileges  is  in  all  re- 
spects the  same  as  the  law  governing  their  expulsion  from 
membership. 

While  this  is  true,  there  is  still  a  well  defined  distinction 
between  suspension  and  expulsion. 

Expulsion  severs  the  connection  between  the  expelled  mem- 
ber and  the  society,  but  suspension  from  membership,  being 
the  temporary  privation  of  rights  and  benefits,  does  not  other- 
wise affect  the  relation  of  the  parties.  The  suspended  mem- 
ber  becomes  entitled  to  his  privileges  as  such  by  lapse  of 
time,  or  some  act  upon  his  part,  as  the  payment  of  dues, 
assessments  or  lines,  etc.;  but  the  expelled  member  may  be  re- 
admitted only  on  the  terms  and  conditions  of  a  new  member. 
It  is  evident,  therefore,  that  a  member's  duty  to  the  society, 
in  the  absence  of  contrary  provisions  in  the  contract  of  mem- 
bership, remains  undiminished  during  the  time  of  his  suspen- 
sion. He  must,  during  all  of  such  time,  perform  all  the 
duties  required  of  other  members,  and  he  is  liable  for  all  dues 
and  assessments  levied  under  the  by-laws.  The  deprivation 
of  all  privileges  and  benefits  by  suspension,  does  not  determine 
the  liability  of  a  member  for  such  dues  and  assessments,  l)y  re- 
moving the  consideration  necessary  to  su])port  the  contract  to 
pay  them. 

The  consideration  of  any  undertaking  to  pay  them,  is  his 
admission  into  the  society  as  a  member.  While  certain  priv- 
ileges and  benefits  are  incident  to  membership,  there  are  also 
certain  conditions  upon  which  the  enjoyment  of  them  is  made 
•.to  depend.     The  suspended  member  is,  then,  subject  to  the 


42  MEMBERSHIl'.  [ClIAP.  3,  §35. 

duties  of  iiienibership,  even  ■wliile  debarred  from  the  enjoy- 
ment of  its  rights  and  benefits.' 

It  is  sometimes  argued  tliat  the  power  to  expel  implies  the 
power  to  suspend,  on  the  principle  that  the  greater  inchides 
the  less. 

But  the  power  to  expel  cannot  justly  be  held  to  include  the 
power  to  suspend,  for  the  suspension  of  a  member  might  work 
great  injustice,  by  depriving  him  of  the  benefits  of  member- 
ship, while  leaving  him  subject  to  the  payment  of  dues,  assess- 
ments, etc.  Sucli  a  punishment  should  only  l>e  inflicted 
when  it  is  provided  for  in  the  contract  of  membership,  for  the 
quasi-judicial  powers  of  societies  should  be  exercised  in  exact 
conformit}^  with  such  contract." 

The  right  to  line  or  expel,  given  in  a  contract  of  member- 
ship, does  not  include  the  right  to  suspend, 

§  35.  Power  of  amotion  in  incori)oratecl  society.^ 

Incorporated  societies  have  inherent  power  to  expel  members 
in  certain  cases,  and  it  follows  that  they  have  power  to  amove 
an  officer  of  the  society  from  the  station  to  which  he  has  been 
assigned,  before  the  expiration  of  his  term  of  office,  when  the 
interest  and  good  government  of  the  society  require  it.  It  is 
well  settled  that  the  inherent  power  of  amotion  may  be  exer- 
cised for  three  causes — 

I'^ii'st,  such  as  have  no  immediate  relation  to  the  office,  but 
are  in  themselves  of  so  infamous  a  nature  as  to  render  the 
offender  unlit  to  execute  any  public  franchise. 

Secondly,  such  as  are  only  against  his  oath  and  the  duty  of 
his  office  as  a  corporator,  and  amount  to  breaches  of  the  tacit 
condition  annexed  to  his  office. 

Thirdly^  such  as  are  of  a  mixed  nature,  as  being  not  only 
against  the  dutv  of  his  office,  but  also  indictable  under  the 
law. 

Before  he  can  be  amoved  for  the  first  offense  above  specified, 
he  must  have  been  convicted  in  the  courts  of  the  land.  But 
if  he  has  fled  the  country  before  conviction,  he  may  be  re- 
moved as  if  convicted.^ 

In  case  of  a  mere  ministerial  officer  appointed  to  hold  office- 
during  the  pleasure  of  the  appointing  power,  he  may  be  re- 
moved at  the  mere  pleasure  of  those  appointing  him,  without 
notice  or  charges;  and  the  appointment  of  a  new  officer  to 
serve  in  his  stead  is  a  sufficient  amotion  of  such  an  officer. 

'Palmetto  Lodpe  v.  Hiibbell,  24  '^Schassberser  v.  Staendel,  9- 
S.  C  (3  Strob.)  457  Weeklv  Notes  of  Cases  379. 

SB.  &  Ad.,  936. 


Chap.  3,  §35.]  membership.  43 

But  notice,  and  an  opportunity  to  be  heard  are  necessary 
where  the  appointment  is  during  good  Ijehavior,  or  for  a  spec- 
ified time,  or  where  charges  are  preferred  against  the  officer- 
Mere  acts,  which  are  a  cause  for  amotion,  do  not  create  a 
vacancy  until  the  amotion  actually  takes  place.  Where  the 
organic  law  of  a  society,  and  its  by-laws  are  silent  as  to  the 
mode  of  proceeding  in  amoving  an  officer,  reference  must  be 
had  to  the  nature  of  the  case,  to  determine  what  course  justice 
requires  the  removing  power  to  pursue,  in  exercising  its  juris- 
diction. 

Where  the  statute  under  which  the  society  is  organized  pro- 
vides a  cause  for  which  an  officer  may  be  removed,  it  is  not 
necessary  that  the  cause  assigned  for  removal  should  be 
stated  in  the  precise  language  of  the  statute;  if  the  charge 
substantially  embraces  the  cause  as  set  forth,  it  is  sufficient.' 
The  power  of,  and  proceedings  in  amotion  rest  upon  the 
same  principles  as  in  expulsion,  and  will  not  be  separately 
treated  of  at  lengtli. 

'  Peoples  V.  Higgins,  15  111.  110. 


44  MEMBERSHIP.  [Chap.  3,  §36. 


Membership— Part  II. 


Incorporated  Societies. 


^EC.  36.  Power  of  incorporated  societies  to  expel  members. 

Sec.  37.  Inherent  power  of  e.xpulsion. 

Sec.  38.  Offenses  against  society  and  tiie  objects  of  its  organization. 

Sec.  39.  Development  of  doctrine  of  inherent  power — modern  doctrine. 

Sec.  40.  Power  of  expulsion  conferred  by  charter. 

Sec   44  \  Breaches  of  corporate  duty. 

Sec   46  f  Expulsion  from  religious  corporations. 

Sec.  47.    Surrender  by  a  society  of  its  right  to  expel  its  members. 

Sec.  48.    Reinstatement  to  membership    in  incorporated    society  by 

courts  of  justice. 
Sec.  49.    Proper  remedj^  of  expelled  member  for  reinstatement. 
Sec.  50.     Mandamus  a  discretionary  writ. 
Sec.  51.     Delay  in  applying  for  restoration  to  membership. 
Sec.  52.    Return  to  writ  of  mandamus. 

Sec.  53.  }  Charges    preferred    against  a  member  of  an  incorporated 
Sec.  54.  f     society. 

§  36.  Power  of  incorijoratetl  societies  to 
■expel  iiiembers.  A  member  of  a  corporation,  whether  it 
he  municipal,  eleemosynary  or  private,  is  in  the  enjoyment  of 
a  franchise,  the  right  to  which  is  not  derived  from  the  body, 
but  is  created  by  statute,  or  exists  by  prescription,  and,  there- 
fore, cannot  be  taken  away  by  the  act  of  the  corporation,  ex- 
•cept  in  certain  extreme  cases. 

As  membership  is  a  right  conferred  by  statute,  or  derived 
from  immemorial  custom  which  implies  the  existence  of  a 
grant,  it  can  neither  be  taken  away  by  act  of  the  corporation, 
nor  withheld  by  the  act  of  the  corporation,  from  anyone  eligi- 
ble to  the  enjoyment  of  it.^ 

Where  corporations  are  for  business  purposes,  are  founded 
upon  private  capital,  and  own  property,  the  modern  cases  are 
very  unanimous  in  holding  that  no  stockholder  may  be  disfran- 
chised, and  thereby  be  deprived  of  his  interest  in  the  property 
of  the  corporation,  without  an  express  authority  for  the  pur- 
pose in  the  charter. 

'  Gay  V.  Farmers'  Mutual  etc.,  51  Pr.  (N.  S)  (N.  Y.)  162;  People  v. 
Mich.  245 ;  White  v.  Brownell,  4Abb.     Medical  Society,  32  N.  Y.  187. 

See  sections  28,  29,  30. 


Chap.  3,  §37.]  membership.  4.5- 

§  37.     Inherent    power    of    exjiulsion.     It     may 

be  stated  as  a  general  rule  that  there  is  a  power  of  expulsion 
inherent  in  every  incorporated  society.  But,  as  held  by  Lord 
Mansfield,  in  the  case  of  Rex  v.  The  Mayor  of  Liverpool,  2 
Burr.  723,  and  in  a  long  line  of  subsequent  cases,  both  in  this 
country  and  in  England,  this  power  is  limited  to  three  causes: 

First,  Offenses  as  a  citizen  against  the  laws  of  the  land; 
when  an  offense  has  been  committed,  which  has  no  immediate 
relation  to  a  members'  corporate  duty,  but  is  of  so  infamous  a 
nature  as  to  render  him  unlit  for  the  society  of  honest  men. 
Such  are  the  offenses  of  perjury,  forgery  etc.  But  before  an 
expulsion  is  made  for  a  cause  of  this  kind,  it  is  necessary  that 
the  member  shall  have  been  convicted  of  the  offense  by  a 
court  or  jury,  according  to  the  law  of  the  land. 

Second,  Violation  of  duty  to  the  society,  as  ?imember  and 
incorjporator  thereof,  such  as  the  obliteration  or  alteration  of 
its  records,  or  acts  tending  to  impair  or  destroy  its  title  to  its 
property,  rights  or  privileges. 

In  this  case  he  may  be  expelled  on  trial  and  conviction  by 
the  corporation. 

TJnrd,  Breach  of  duty  in  respect  alike  to  the  corporation 
and  the  laws.  This  is  an  offense  of  a  mixed  nature,  against 
the  member's  duty  as  a  corporator,  and  also  indictable  by  the 
law  of  the  land. 

In  these  cases  the  expulsion  of  the  member  is  but  the  exer- 
cise of  a  power  incident  to  the  right  of  self-preserv^ation. 

It  has  been  laid  down  as  a  rule  that  offenses  against  corpor- 
ate duty  consist  of  "  things  done  that  work  to  the  destruction 
of  the  body  corporate,  or  to  the  destruction  of  the  liberties 
and  privileges  thereof."  Ang.  &  Ames,  on  Corp.  349-  2 
Kent's  Com.  297. 

But  as  observed  in  People  v.  Medical  Society,  24  Barb.  (N. 
Y.)  571,  this  rule  may  be  somewhat  too  restricted  in  some 
special  cases,  but  it  is  the  general  and  leading  rule,  and  is 
rarely  departed  from.  If  the  member  does  acts  which  are 
calculated  to  destroy  the  corporation,  or  its  liberties  and  pri- 
vileges, he  may  be  disfranchised.  He  thus  forfeits  liis  right 
to  membership. 

§  38.  Offenses  against  society  .ind  the  objects  of 
its  organization.  It  is  very  clear  that  the  character  of  the 
act  considered  as  an  offense  against  the  corporation,  depends 
materially  upon  the  nature  and  purpose  of  the  corporation  it- 
self.   The  duties  of  membership  should  be  liberally  construed 


46  MEMBERSHIP.  [ClIAP.  3,  §39. 


with  reference  to  the  objects  for  which  the  society  was  incor- 
porated. Such  duties,  according  to  Lord  Mansfield,  are 
tacit  conditions  annexed  to  the  franchise  of  a  member. 
Whether  an  act  be  a  breach  of  corporate  duty,  or  not,  should 
be  judged  entirely  by  its  effect  on  the  objects  of  the  society. 
Where  a  member  perform-s  an  act  in  direct  contravention  of 
the  ])urposes  for  which  the  cliarter  was  obtained,  he  may  be 
expelled. 

The  authority  of  an  incorporated  society  to  expel  its  mem- 
bers is  a  matter  demanding  the  serious  and  careful  consider- 
ation of  the  courts  in  each  particular  case. 

While  the  individual  rights  of  those  who  are  members 
.should  be  carefully  guarded  and  protected,  and  the  courts 
should  see  that  the  powers  conferred  are  not  exceeded  and 
abused,  they  should,  at  the  same  time,  sustain  any  legitimate 
and  proper  action  which  may  have  been  taken  by  the  society, 
within  the  scope  of  its  charter,  to  maintain  and  uphold  the 
objects  of  its  creation. 

Societies,  clubs  and  voluntary  associations  of  all  kinds  are 
increasing  with  great  rapidity  in  this  country,  and  the  power 
of  expulsion  is  naturally  developing  in  its  application  to  these 
widely  different  organizations. 

It  seems  to  have  been  the  policy  of  courts  for  many  years 
to  restrict  the  jurisdiction  of  societies  over  the  rights  of  their 
members,  but  courts  are  now  inclined  to  sustain  the  action  of 
societies  in  expelling  members  for  causes  which  tend  to  mili- 
tate against  their  good  government  under  their  charters. 

Societies  may,  by  by-law,  provide  for  what  offenses  it  will 
exercise  this  inherent  power  of  expulsion,  and  if  such  by-laws 
are  reasonably  within  the  causes  of  expulsion  above  set  forth, 
the  courts  will  hold  them  to  be  valid  and  binding. 

§  39.  Development  of  doctrine  of  inherent 
power — modern  doctrine.  These  principles  now  consti- 
tute the  modern  doctrine  on  the  power  of  expulsion  of  members 
from  incorporated  societies.  A  comparison  of  the  modern 
rule  with  the  early  English  cases  will  show  the  growth  and 
development  of  this  power  under  the  liberal  application  of 
sound  principles. 

The  famous  case  of  James  Bagg  was  reported  by  Lord  Coke 
in  11  Tie]).  93.  In  Bagr/s  Case  it  was  held  by  the  Court  of 
King's  Bench  that  the  power  of  expulsion,  being  judicial  in  its 
nature,  must  be  exercised  by  the  courts  of  the  land  in  all  cases, 
except   where   authority  to  expel  its  members  was  expressly 


Chap.  3,  §40.]  membership,  47 

conferred  upon  the  society  by  its  charter,  or  was  derived  by 
prescription ;  and  that  wliere  no  such  express  authority  existed, 
there  must  be  a  conviction  of  some  offense  in  a  court  of  law 
before  the  offending  member  might  be  disfranchised. 

But  in  applying  this  rule,  it  was  found  to  be  too  narrow  and 
restricted  to  enable  corporations  properly  to  govern  their  in- 
ternal matters  of  discipline,  and  to  attain  the  objects  for  which 
they  were  created,  and,  afterward,  in  Rex  v.  Richardson,  1 
Burr.  517,  Lord  Mansiield  held  the  doctrine  to  be  as  has  been 
stated. 

While  the  more  modern  cases  have  added  no  new  causes  for 
which  the  inherent  power  of  expulsion  may  be  exercised,  the 
tendency  is  to  hold  the  member  to  a  rigid  observance  of  his 
duty  as  a  corporator,  and  to  look  with  more  favor  upon  the 
charge  against  a  member,  of  breach  of  corporate  duty. 

§  40.    Power  of  expulsion  conferred  by  charter. 

The  power  of  expulsion  for  the  three  causes  above  specified, 
being  inherent  in  an  incorporated  society,  any  express  power 
of  expulsion  for  certain  defined  causes,  conferred  upon  a  so- 
ciety by  its  charter,  is  to  be  regarded  as  cumulative. 

A  society  may  not  expel  members  for  minor  offenses  with- 
out an  express  provision  of  its  charter  conferring  upon  it  that 
right ;  and  a  general  provision  that  the  society  shall  have 
power  to  expel  its  members,  confers  upon  it  no  greater  power 
than  it  inherently  possesses.  While  a  general  provision  in  the 
charter,  that  the  society  shall  have  power  to  expel  its  members, 
in  fact  confers  upon  the  society  no  other  or  greater  power 
than  is  inherent  in  it,  the  courts,  in  some  cases,  seem  to  be  in- 
clined to  give  a  broader  and  more  liberal  construction  to  its 
powers  when  they  are  thus  recognized  in  the  charter. 

Where  the  charter  confers  upon  a  society  the  right  to  expel 
its  members,  under  such  rules  and  regulations  as  it  shall  adopt, 
this  power  may  not  be  used  in  an  arbitrary  and  unjust  numner, 
and  without  regard  to  the  objects  and  necessities  of  the  society. 
When  a  person  becomes  a  member  of  an  incorporated  volun- 
tary society,  he  does  so  with  reference  to  the  main  objects  of 
its  existence,  as  pointed  out  in  the  charter.  When  an  offense 
is  totally  unconnected  with  the  affairs  and  objects  of  the  so- 
ciety, disfranchisement  cannot  be  necessary  for  the  good  gov- 
ernment of  the  corporation. 

The  authority  is  conferred  for  the  purpose  of  enabling  the 
incorporated  society  to  accomplish  the  objects  of  its  creation. 


48  MEMBERsmr.  [Chap.  3,  JJ40. 

and  tlie  power,  in  its  exercise,  is  to  be  limited  to  such  objects 
and  purposes. 

But  corporations  inherently  have  the  power  of  self -protec- 
tion, and  the  right  to  do  those  things  which  are  necessary  to 
accomplish  the  objects  of  its  existence,  and,  hence,  it  will  be 
seen  that  these  general  powers  of  expulsion,  wdiich  are  con- 
ferred upon  societies,  in  reality  add  nothing  to  their  inherent 
powers. 

Courts,  in  their  desire  to  give  to  societies  a  sound  discretion 
in  determining  what  constitutes  a  breach  of  a  member's  duty 
as  a  corporator,  have  sometimes  referred  to  the  fact  that,  in 
the  case  at  bar,  the  power  of  expulsion  was  conferred  by 
the  charter;  but  while  this  tendency  to  be  liberal  in  defin- 
ing the  offenses  which  fall  within  the  breach  of  a  inemlier's 
corporate  duty,  is  in  the  right  direction,  it  cannot  rightly  be 
placed  upon  the  ground  that  the  power  of  expulsion  has  been 
extended  by  any  general  recognition  in  the  charter.  It  may 
be  confidently  stated  that  there  is  no  instance  in  which  the 
expulsion  of  a  member,  under  the  general  power  conferred  by 
charter,  has  been  sustained,  where  the  offense  did  not,  with  a 
reasonable  and  liberal  construction,  come  within  the  second 
cause  for  expulsion  as  above  set  forth,  viz.,  a  breach  of  the 
member's  duty  to  the  society. 

In  Pennsylvania,  where  the  approval  of  the  Supreme  Court 
of  the  state  to  the  provisions  of  the  charter  is  required  before 
a  society  can  become  incorporated,  it  has  been  held  that  the 
Court  will  not  approve  a  charter  for  the  incorporation  of  a 
society,  where  the  articles  of  incorporation  contain  an  indefinite 
statement  of  the  offenses  that  may  result  in  expulsion.  The 
court  refused  to  approve  a  charter  which  provided  that  "  any 
member  may  be  expelled,  who  commits  any  misdemeanor,  or 
anv  other  act  that  may  prove  injurious  to  his  character  or 
standing.'" 

It  refused  to  approve  one  which  gave  to  the  majority  of  the 
members  the  power  to  expel  any  member  "  guilty  of  any 
offense  against  the  law,"^  and  one  which  gave  to  the  society- 
power  to  expel  any  member  who  shall  be  "guilty  of  actions 
which  may  injure  the  association."  ' 

lit  re  charter  of  Rev.  David  Mulholland  Benevolent  Society, 
it  was  held  that  a  charter  will  not  be  approved  where  there  is 

'  Butchers'  Beneficial  Association,  ^  Butchers'  Beneficial  Association,. 
38  Pa.  St.,  298.  35  Pa.  St.,  151. 

^  Beneficial    Association  of  Bro- 
therly Unity,  38  Pa.  St.,  299. 


Chap.  3,  §41.]  membership.  49 

a  provision  in  it,  declaring  that  membership  in  the  society  sliall 
he  forfeited  upon  enlistment  in  the  army  or  navy.  In  dis- 
cussing such  a  provision,  the  Court  savs:  "  It  is  against  public 
policy.  A  corporation  which  is  a  creature  of  the  law  ought 
not  to  proscribe  its  members  for  aiding  the  government  which 
creates  and  protects  it.'"  But  it  has  been  held  that  a  l)y-law 
of  an  incorporated  benelit  society,  providing  that  any  member 
who  shall  enlist  as  a  soldier,  or  enter  on  board  any  vessel  as  a 
seaman  or  mariner,  shall  thenceforth  lose  his  membership,  is 
valid  and  reasonable,  in  view  of  the  purposes  of  the  organiza- 
tion, and  "is  not  forbidden  by  any  principle  of  public  policy.'" 

§  41.  Breaches  of  corporate  duty.  Where  one  of 
the  objects  of  an  incorporated  society  is  to  provide  assistance 
and  sick  benelits  for  sick  members,  it  is  subversive  of  the 
fundamental  objects  of  the  society, — an  act  which  tends  to  its 
destruction, — for  a  member  to  feign  sickness,  and  draw  money 
from  the  benelit  fund  on  account  of  such  feigned  sickness,  and 
the  society  has  power  to  expel  a  member  for  such  an  offense.* 

Where  the  main  object  of  an  incorporated  mutual  benelit 
society  is  to  furnish  life  indemnity,  or  pecuniary  benelits  to 
widows,  orphans,  heirs,  etc.,  of  deceased  members,  indemnity 
for  accidents,  sickness  or  permanent  disability  to  members 
thereof,  the  non-payment  of  dues  and  assessments  is  sub- 
versive of  the  fundamental  oliject  of  the  society,  tends  to  its 
destruction,  and  is  a  violation  of  the  member's  duty  as  a 
corporator,  ^ot  o7ily  has  such  a  society  an  inherent  right  to 
expel  members  for  non-})ayment  of  dues  and  assessments,  but,. 
from  its  nature  and  necessities,  it  has  a  right  to  provide  in  its 
laws,  that  such  non-payment,  within  a  stipulated  time  after 
notice,  shall,  without  personal  or  other  notice  to  the  delinquent 
meml>er,  lyso  facto ^  work  a  forfeiture  of  all  the  member's 
rights  of  membership.^ 

Where  an  officer  or  a  member  of  an  incorporated  society,  in 
account  with  the  society,  charges  it  with  money  he  has  never 
paid  out  and  disbursed,  and  seeks  to  obtain  credit  from  the 
society  for  such  fraudulent  items,  he  is  guilty  of  an  offense 
against  his  duty  as  a  corporator,  and  may  be  expelled.' 

Though  a  person  who  is  not  a  member  of  an  incorporated 

•  10  Phil.  Rpts.,  19.  Fed.  Rep.,   62;  ]\rc'Donald  v.  Ross- 
'  Franklin   v.  Commonwealth,  10    Lewin,  29  Hun  (N.  Y.).  S7  ;  Benevol- 

Barr  (Pa  ),  359.  ent  Society  v.  Baldwin,  86  111..  471). 

^Society,  etc.,   v.  Meyer,  52  Pa.  Mvin<r  v.    Mavor,    2  Ld.   Raym. 

.St.,  125.  15GG;  King  V.  Clialke,   1  Ld.  Raym. 

*  Rood  V.  Benefit  Association,  31  226. 


50  MEMBERSHIP.  [ClIAP.  3,  §42. 

mutual  benefit  society,  owes  to  it  no  corporate  duty,  yet  a 
person  who  applies  for  membership  and  insurance  therein,  is 
required  to  act  in  the  utmost  _^ood  faith.  If  he  procure  admission 
to  menjbership  on  the  false  representation  that  he  is  in  good 
health,  and  by  suppression  of  the  fact  that  he  has  an  hereditary 
or  incurable  sickness,  he  commits  an  offense  against  his  cor- 
porate duty  by  acceptance  of  membership  and  the  contract  of 
of  insurance  so  procured  by  fraud,  and  may  be  expelled.' 

Where  the  charter  of  an  association  stated  that  it  was 
formed,  among  other  things,  "  to  inculcate  just  and  equitable 
])rinciples  in  trade,"  it  was  held  that  a  member  might  be  ex- 
pelled for  obtaining  goods  under  false  pretenses,  though  the 
offense  was  not  committed  within  the  local  jurisdiction  of  the 
•corporation,  nor  against  a  member  of  the  association. 

The  Court  says:  "  When  a  person  became  a  member,  and 
subscribed  to  the  articles  of  the  association,  he  agreed  as  a 
<iondition  of  his  being  associated  with  the  company,  that  he 
would,  by  his  example  and  his  practice,  aid  in  this  great  object 
and  leading  purpose  of  the  corporation.  This  could  most  ef- 
fectually be  accomplished  by  a  practice  of  integrity,  honesty 
and  fairness  in  commercial  dealings,  both  in  reference  to  the 
acts  of  the  association  and  its  members,  at  its  place  of  busi- 
ness and  elsewhere,  at  all  times  and  on  all  occasions  when 
engaged  in  trade,  *  *  *  *  He  had  no  right  to  make  a 
distinction  between  dealing  with  members  and  strangers."" 

§  4:2.  Same  subject  continued.  Where  a  medical 
society,  both  by  its  charter  and  by-laws,  has  jurisdiction  to  in- 
quire into  and  pass  judgment  upon  the  conduct  of  its  mem- 
bers, and,  in  a  proper  case,  to  expel  a  member,  gross  immoral- 
ity in  a  professional  transaction,  having  a  tendency  to  bring 
the  profession  into  dishonor  before  the  community,  if  distinctly 
charo;ed  and  proved,  is,  sufficient  to  justify  the  exercise  of 
its  power.  And  where  a  member  of  such  a  society  sold  out  his 
practice  and  good  will  to  another  physician,  and  agreed  not  to 
practice  medicine  in  the  community,  but  soon  afterward 
beo-an  to  practice  in  the  community,  in  violation  of  his  agree- 
ment, and  the  society  expelled  him  therefor,  the  court  refused 
to  restore  him  to  membership.' 

A  medical  society,   having  power  by  charter  to  expel  its 

'  Morel  Y.   La    Societe,   1   Lower  of  Commerce,  29  Wis.  45. 

Canada  Jurist  1.  ^  ^.i^j-q^j  y.  Mass.  Medical  Soc' 

-'  People  V.  N.  Y.  Com.   Assn.  18  12  Cush.  403. 
Abb.  Pr.  271 ;  Dickenson  v.  Chamber 


'Chap.  3,  §43.]  membership,  51 

"members,  passed  a  by-law  providing  that  no  horaoepathic 
physician  should  be  admitted  as  a  member,  and  passed  another 
by-law  providing  that  any  member  might  be  expelled  for  any 
conduct  unbecoming  and  unworthy  an  honorable  physician 
and  member  of  the  society.  Under  this  last  by-law,  a  member 
was  charged  with  practicing  medicine  according  to  homre- 
pathy,  and  the  Court  held  the  charge  sufficient  under  the 
powers  and  objects  of  the  society.' 

A  member  of  a  society,  in  resisting  the  unlawful  authority 
of  the  society,  commits  no  offense  against  his  duty  as  a 
member. ' 

"Where  the  charter  of  the  Chamber  of  Commerce  conferred 
upon  the  association  the  power  to  expel  members  as  it  should 
see  fit,  the  court  held  that  the  association  had  no  power  to 
expel  a  member  because  he  refused  to  submit  to  tlie  arbit- 
rament of  the  association,  according  to  the  by-laws,  a  claim 
.against  a  fellow  member.  The  Court  says:  "  Is  it  necessary 
for  the  good  government  and  management  of  the  affairs  of  the 
corporation,  that  it  should  have  power  to  compel  him  to  do 
any  such  act  ?  We  cannot  see  that  it  is.  On  the  contrary, 
the  assumption  and  exercise  of  the  power  in  this  case  strikes 
us  very  unfavorably."  ^ 

A  Board  of  Trade  or  Chamber  of  Commerce,  the  object 
of  which,  as  expressed  by  its  charter,  is  to  inculcate  just  prin- 
'Ciples  in  trade,  may  expel  a  member  for  gross  violation  of  a 
contract  entered  into  by  him,  even  though  the  contract  be 
between  the  member  and  one  who  is  not  a  member,  and  even 
though  the  contract  may  be  void  by  the  Statute  of  Frauds.  •» 

§  43.  Same  subject  continued.  The  charter  of  the 
Board  of  Trade  of  Chicago  provides  that  "  said  corporation 
shall  have  the  right  to  admit  or  expel  such  persons  as  they  may 
see  fit,  in  the  manner  to  be  prescribed  by  the  rules,  regulations 
or  by-laws  thereof." 

Under  that  power  the  corporation  adopted  a  by-law  pro- 
viding that,  if  a  member  fails  to  com])ly  with  a  business  con- 

'  Gregg  V.  Mass.  Medical  Societ}',  Sweeney    v.    Beneficial  Society,  14 

111  Mass.  185.  VV.  N.  0.  466-486. 

■^  Leech  v.  Harris,  2  Brewster  (Pa)  *  Dickenson  v.  Chamber  of  Com- 

571.  merce,  29  Wis.   45;    Blumenthal   v. 

3  State  ex  rel  v.  Chamber  of  (/om-  Cincinnati   Chamber  of  Commerce, 

merce,  20  Wis.  63;  See'State  v.  Mer-  7  Cin.  Law  Bui.  327;    People  v.  N. 

-chants  Exchantce,  2  Mo.   App.  96;  Y.  Commercial  Association,  18  Abb. 

Pr.  271. 


MEMBERSiiir.  [Chap.  3,  §43. 


tract  made  with  another  member,  upon  satisfactory  evidence  of 
sncli  fact,  he  shall  l)e  expelled. 

The  court  held  that,  although  the  discretion  granted  hy  the 
charter  to  expel  members  is  not  purely  arbitrary,  and  can  be 
exercised  onl}''  for  some  just  and  reasonable  cause,  yet,  as  this 
rule  was  germane  to  the  purposes  for  which  the  corporation 
was  created,  a  member  might  be  expelled  for  non  compliance 
with  such  a  contract.  ' 

A  member  having  been  expelled  from  the  common  council 
of  the  city  of  Liverpool,  applied  to  the  King's  Bench  for  a 
mandamus  to  restore  him.  The  return  of  the  Mayor  showed, 
as  cause  for  expulsion,  that  the  meml)er  had  become  a  bank- 
rupt. The  court  held  that  the  canse  w^as  insutticient,  as  bank- 
ruptcy was  no  ground  for  disfranchising  a  member  of  a  muni- 
cipal common  council.  ^ 

A  member  had  vilitied  a  fellow  meml>er,  in  violation  of  a 
by-law,  and  had  been  expelled  therefor.  The  society  was 
created  for  the  purpose  of  aiding  its  members  when  in  need, 
and  of  relieving  distressed  Irishmen  euiigrating  to  the  United 
States.  The  expelled  member  applied  to  the  court  to  be  rein- 
stated to  the  privileges  of  membership. 

The  Chief  Justice,  speaking  for  the  court,  said:  "  My  opin- 
ion will  be  founded  on  the  great  and  single  point  on  which  the 
case  turns.  Is  this  by-law  necessary  for  the  good  government 
and  support  of  the  affairs  of  the  corporation?  I  cannot  think 
that  it  is.  *  *  *  * 

On  mature  reflection  it  appears  to  me  that,  without  an  ex- 
press power  in  the  charter,  no  man  can  be  disfranchised  unless 
he  has  been  guilty  of  some  offense  wliich  either  effects  the 
interests  or  good  government  of  the  corporation,  or  is  indicta- 
ble by  the  law  of  the  land."  ' 

In  Earl's  Case,  Carthew  173,  it  was  held  that  a  member  of  a 
corporation  may  not  be  disfranchised  for  any  personal  offense 
of  one  member  to  another. 

Two  members  of  an  incorporated  club  were  sitting  together 
in  conversation  in  the  bar-room  of  the  club-house,  when  a  third 
member  came  in  and  used  insulting  language  which  was 
understood  by  one  of  the  two  to  be  applied  to  himself.  He 
thereupon  struck  the  offender,  and  was  afterward  expelled  for 
the  offense.     The  court  held  that  the  act  of  striking  his  fellow 

'  People    V.     Chicago    Board    of  '  Commonwealth  v.   St.   Patrick's 

Trade,  45  III.  112,  Benevolent  Society,  2  Binney  (Pa.) 

*  Rex  V.  The  Mayor  of  Liverpool,  448. 
2  Burr.  732. 


•Chap.  3,  §44.]  membership.  53 

member  was  not  snch  as  would  justify  his  expulsion  from  the 
•club  by  the  members  thereof, — that  mere  offenses  against 
decorum,  personal  offenses  of  one  member  against  "another,  so 
long  as  they  do  not  tend  to  the  subversion  of  the  government 
of  the  corporation  and  the  management  of  its  affairs,  do  not 
justify  disfranchisement  on  the  ground  of  being  against  the 
duty  of  the  corporator.  ' 

In  Ailnut  V.  High  Court,  etc.,  Mich.,  28  Is'.  W.  Kep.  802, 
it  was  held  that  the  libel  of  one  member  by  another  was  no 
ground  for  expulsion. 

§  44.  Same  subject  continued.  Where  a  society  is 
incorporated  under  a  general  law  providing  for  the  incorpora- 
tion of  l»enetit  societies,  its  object  is  obviously  civil  and 
benevolent,  and  not  religious,  and  it  may  not  be  made,  directly 
at  least,  the  promoter  of  religious  discipline.  "While  it  can 
refuse  admittance  to  persons  who  do  not  believe  in  certain 
religious  doctrines,, by  rejecting  their  applications,  yet  it  may 
not  compel  a  person  who  has  once  been  admitted  to  member- 
ship, to  continue  in  that  faith,  and  to  continue  to  observe  the 
discipline  of  any  church,  on  pain  of  expulsion  from  the  society. 
Such  religious  faith  and  discipline  are  totally  unconnected 
with  the  objects  of  benevolent  societies. 

The  law  permits  religious  societies  to  establish  rules,  regu- 
lations or  articles  of  faith,  for  the  government  of  their  own 
bodies,  and  he  who  becomes  a  member  of  such  a  religious  soci- 
ety agrees  to  these  rules,  regulations  and  articles  of  faith,  and 
to  the  mode  of  discipline  and  trial  provided  by  it.  But  where 
a  society  is  organized  and  incorporated  for  benelicial  and 
benevolent  purposes,  under  the  statute  of  the  state,  a  member 
may  not  be  deprived  of  his  rights  in  the  society  by  a  by-law 
not  necessary  for,  or  connected  with  the  ])urposes  and  objects 
of  the  society,  and  relating  to  religious  discipline,  even  though 
he  may  have  assented  to  it. 

In  such  a  society,  a  by-law  providing  for  the  expulsion  of 
any  member  who  shall  not  twice  during  each  year  attend  to 
his  duty  of  ]u-ivate  confession  and  reception  of  the  Holy  Com- 
munion, is  ultra  vires  and  void." 

In  the  case  of  The  People  v.  The  Medical  Society  of  the 

'Evans  v.  Philadelphia  Club,  50  Society,  24  How.  Pr.  (N.  Y.)  21G; 
Pa.  St.  107.  Ppople   v.   Beuevolent    Society,   41 

'People  V.  Franciscns  Benevolent     Mich.  67. 


54  MEMBERSHIP.  [Chap.  3,  ^45v 

County  of  Erie,  2-i  Barb.  571,  the  court  held  that  a  society 
chartered  merely  for  the  promotion  of  medical  science  had  no 
right  to  decide  what  fees  its  members  should  charge  for  their 
professional  services,  and  to  expel  a  member  who  had  disre- 
garded such  a  regulation.  The  Court  says  :  "  Can  it  be  said 
with  any  plausibility  that  the  establishment  of  a  tariff  of 
prices  for  medical  services  was  a  legitimate  object  of  the  crea- 
tion of  the  corporation,  or  that  it  was  necessary,  or  in  any 
degree  contributed  to  the  accomplisliment  of  the  purposes  or- 
objects  for  which  the  law  authorized  the  corporation  ?  " 

'a  member  of  a  society,  the  charter  and  by-laws  of  which  con- 
tain no  definition  of  offenses  against  the  society,  or  provisions 
for  imposing  penalties,  may  not  be  expelled  or  suspended  for 
non-payment  of  a  line  imposed  by  the  society.' 

§  45.    Expulsion  from    religious    corporations. 

From  the  principles  and  authorities  above  set  forth,  it  is  evi- 
dent that  a  corporation,  the  object  of  which  is  merely  to  hold  the 
title  to  property,  can  neither  admit  nor  expel  members. 

As  voluntary  societies  f  requentlj^  make  use  of  corporations 
to  hold  their  property,  while  they  themselves  perform  acts 
entirely  independent  of  such  corporations,  it  is  necessary  that 
the  distinction  between  those  acts  which  are  corporate,  and. 
those  which  are  merely  the  acts  of  these  societies,  should  be 
thoroughly  understood  and  constantly  kept  in  view. 

In  most  of  the  states,  the  laws  provide  for  the  incorporation 
of  religious  societies.  There  is,  of  course,  great  difference 
between  the  provisions  of  these  laws,  but  they  are,  in  the 
main,  drawn  upon  the  same  general  plan. 

Persons  desirous  of  forming  themselves  into  a  religious 
society  may  sign  articles  of  association  for  that  purpose,  agree 
upon  a  name,  elect  trustees,  and  put  their  articles  on  record 
when  duly  perfected.  They  thereby  become  a  corporation  by 
the  name  agreed  upon,  and  may  take,  hold  and  convey  prop- 
erty, and  exercise  the  ordinary  functions  of  corporate  bodies. 
The  corporators  are  not  necessarily  professors  of  any  particu- 
lar belief  or  faith,  or  members  of  any  church.  Corporate 
succession  is  kept  up  by  conferring  the  privileges  of  corpora- 
tors on  all  who  regularly  attend  worship  in  the  society,  and 
contribute  to  its  support.  The  trustees  who  are  to  manage 
the  temporal  affairs  of  the  corporation  may,  or  may  not,  be 
church  members. 

'Erd  V.  Bavarian  Relief  Ass'n.,  Journeyman  Tailor's,  etc.,  Unioa, 
Mich.,  34  N.  W.  Rep.,  555;    Otto  v.     Cal.,  17  Pac.  Rep.  217. 


Chap.  3,  §46.]  membership.  55 

Connected  with  the  corporation  there  is  a  church  organiza- 
tion. This  is  spiritual  in  its  objects.  Its  name  may,  or  may 
not,  be  identical  with  the  name  of  the  corporation. 

This  chnrch  has  its  voluntary  members  who  are  supposed 
to  hold  certain  religious  dogmas.  It  is  not  incorporated,  and 
has  nothing  whatever  to  do  with  the  temporalities.  It  does 
not  control  the  property  or  the  trustees.  Membership  in  the 
corporation  arises  by  operation  of  law  from  attendance  at 
public  worship,  and  contributing  to  the  support  of  the  corpor- 
ation. The  church  can  admit  members  into  fellowship  with 
it,  according  to  its  rules  of  admission,  but  it  cannot  receive  a 
a  person  into  the  corporation,  nor  can  it  expel  a  person  from 
the  incorporated  society. 

On  the  other  hand,  the  corporation  has  nothing  to  do  with 
the  church,  except  as  it  looks  after  the  temporalities,  and  pro- 
vides for  the  w^ants  of  the  church. 

It  cannot  alter  the  church  faith;  it  cannot  receive  members; 
it  cannot  expel  members;  li  cannot  prevent  the  church  from 
receiving  or  expelling  whomsoever  that  body  shall  see  lit  to 
receive  or  expel.' 

A  religious  corporation  has  no  spiritual  capacity;  it  is  given 
capacity  in  respect  to  temporalities  only.  The  rules  of  the 
church  as  to  the  discipline  of  members,  have  no  relation  to 
the  corporate  property  or  corporate  matters.  It  has  no  power 
to  try  a  corporator  for  moral  delinquency,  or  to  disfranchise 
him  in  consequence  thereof." 

Immoral  men  may  not  usually  attend  divine  worship,  con- 
tribute to  the  support  of  religious  corporations,  and  insist  upon 
their  rights  in  such  societies,  but,  when  they  do,  the  law  does 
not  distinguish  between  them,  and  those  who  have  been  regu- 
larly admitted  into  the  church. 

The  expulsion  of  members  from  unincor])orated  societies 
will  be  treated  of  further  along  in  this  chapter,  but  suthcient 
has  already  been  said  to  show  tliat  a  religious  corporation,  the 
sole  object  of  which  is  to  hold  and  administer  property,  may 
not  expel  its  members. 

Sec.  4(>.  Same  subject  continued.  Ex])ulsion  from 
membership  in  the  church  is  effectual  to  exclude  the  member 
from  the  spiritual  privileges  enjoyed  by  its  members,  but  it 

'  Hardin  v.  Baptist  Church,  51  ■*  People  v.  Geriuau  etc.,  Churcli  53 
Mich.  137;  Calkins  v.  Cheney,  93  N.  Y.  103;  Livinsrston  v.  Trinity 
111.  464.  Church.  16  Vroom  230;  Sale  v.  Bai>- 

tist  Church  G2  Iowa  26. 


56  MEMBERSHIP.  [Chap.  3,  ^4:7. 

does  not,  in  the  least,  att'ect  his  status  as  a  nieniLer  of  the  in- 
corporated society.  If,  because  of  his  expulsion  from  the  church, 
anyone  should  exclude  him  from  the  proper  enjoyment  of  the 
property  of  the  corporation  for  religious  worshipVnd  instruc- 
tion, he  may  maintain  an  action  therefor,  and,  in  fixing  his 
damages,  the  injury  to  his  feelings  may  be  considered.  The 
same  course  may  be  taken  if  prevented  from  exercising  his 
right  to  vote  when  entitled  to  such  right  by  the  statute.' " 

But  the  excluded  member  must,  in  such  cases,  sue  the  per- 
sons who  illegally  excluded  him.  An  action  in  damages  for 
expulsion  from  the  church  and  deprivation  of  church  privileges, 
will  not  lie  against  the  religious  corporation  connected  with'the 
church.  While  it  is  true  that  the  church  is  an  integral  part 
of  the  corporation,  it  by  no  means  follows  that  the  corporation 
is  chargeable  M'ith  the  wrongful  acts  of  members  of  the  church 
in  expelling  its  members.  Counties,  towns,  and  school  dis- 
tricts are  integral  parts  of  the  state,  but  the  state  is  not  for 
that  reason  liable  for  their  torts.  The  incorporated  society 
may  neither  expel  members  from  the  church,  nor  prevent  such 
expulsion,  and  it  is  neither  liable  in  damages  for  a  wrongful 
expulsion  from  the  church,  nor  can  it  be  proceeded  against  by 
mandamus  to  restore  an  expelled  member  to  his  "spiritual 
privileges.*-' 

§  47.     Surrender  by  a   society  of  its    rig^lit   to 

expel  its  members.  While  it  is  not  competent  for  an  in- 
corporated society,  by  its  constitution  or  by-laws,  to  surrender 
absolutely  its  inherent  power  of  expulsion — its  right  to  per- 
form an  act  necessary  to  the  preservation  of  its  existence, — it 
may,  nevertheless,  by  proper  laws,  qualify  and  abridge  that 
right,  by  pointing  out  the  manner  in  whicli,  and  the  occasions 
upon  which,  it  will  exercise  such  right.  A  limitation  which 
does  not  deprive  the  incorporated  society  of  the  right  to  pro- 
tect and  preserve  its  franchise,  is  unobjectionable. 

Where  the  constitution  of  an  incorporated  mutual  benefit 
society  provides  that  "the  manner  of  suspension  for  the  non- 
payment of  dues  and  assessments  shall  be  detailed  in  the  by- 
laws," and  no  by-law  is  adopted  by  the  society  on  the  subject 
of  suspension,  as  required  by  the  foregoing  provision,  the  neg- 
lect of  the  society  to  provide  a  mode  Wd  manner  of  suspen- 

1  People  V.German  etc.,  Church,     Mich.137;  People  v.  German  Church, 
53  N.  Y.  103.  Supra. 

■  Hardin   v.    Baptist    Church,    51 


'Chap.  3,  §-iS.]  membership,  57 

sion,  prohibits  it  from  exercising  its  inherent  power  to  expel 
a  member  for  fp-ihire  to  perform  his  cor])orate  duty  in  the 
payment  of  dues  and  assessments.' 

§  48.  Ileinstateineiit  to  inenibersliip  in  incor- 
porated society  by  courts  of  justice.  AVhere  the 
charter  of  a  society  provides  for  an  offense,  directs  the  mode 
of  proceeding,  and  authorizes  the  society,  on  conviction  of  a 
member,  to  expel  him,  this  expulsion,  if  the  proceedings  are 
not  irregular,  is  conclusive,  and  cannot  be  inquired  into  collat- 
erally by  mandamus,  action  or  any  other  mode. 

The  courts  have  jurisdiction  to  keep  such  tribunals  in  the 
line  of  order,  and  to  prevent  abuses,  but  they  do  not  inquire 
into  the  merits  of  what  has  passed  in  rem  adjudicatam  in  a 
regular  course  of  proceeding. 

The  society  in  such  a  case  acts  judicially,  and  its  sentence  is 
conclusive  like  that  of  any  other  judicial  tribunal.  This  is 
nothing  more  than  the  application  to  the  decrees  of  these 
societies,  affecting  their  members,  of  the  familiar  principles 
that  obtain  in  relation  to  the  validity  and  effect  of  judicial 
determinations  of  controversies  between  citizens  in  the  courts. 
If  the  court  has  jurisdiction  of  the  subject  matter  and  the  par- 
ties, its  judgmeiit,  however  erroneous  on  the  law  and  the  facts, 
concludes  the  parties  unless  appealed  from. 

When  an  expelled  member  resorts  to  a  court  of  justice  to 
com])el  the  society  to  reinstate  him,  he  does  not  appeal  from 
the  judgment  of  the  society;  courts  of  justice  have  no  appel- 
late jurisdiction  in  such  cases. 

All  that  he  can  ask  the  court  to  decide  is,  whether  or  not 
the  charge  against  him  was  sufficient  under  the  powers  of  the 
society,  and  whether  the  necessary  steps  for  his  expulsion 
were  regularlj^  taken  after  notice  and  opportunity  to  be  heard. 

The  supervision  which  courts  maintain  over  the  right  of  ex- 
pulsion in  cor])orate  societies,  is  derived  from  what  is  termed 
the  visitorial  power  of  courts. 

In  this  country,  the  visitorial  power  of  correcting  the  abuses 
and  irregularities  of  incorporated  societies,  is  vested  in  the 
courts  of  general  jurisdiction. 

The  assent  of  the  menil)ers  to  the  provisions  of  the  charter 
and  by-laws  is  a  fundamental  retpiisite  of  membershi]),  and 
where  the  right  of  exjiulsion  for  certain  causes  is  conferred 

'  District    Grund     Lodce    etc.,    v. 
•Cohn,  20  111.  Api).  335. 


5S  MEMBERSHIP.  [ClIAP.  3,  §49. 

upon  the  incorporated  society,  it  may  be  exercised  in  the 
manner  and  for  the  ])iirposes  prescril)ed  in  its  laws.  J>iit 
while  courts  will  not  inquire  into  the  merits  of  the  decisions 
of  incoporated  societies  in  expelling  a  member  in  the  regular 
course  of  proceedings,  yet,  if  thfe  expulsion  has  been  irregularly 
conducted,  without  due  authority,  sufficient  cause,  or  proper 
notice,  the  courts  will  interfere  by  inandamus  to  compel  the 
restoration  of  the  member  to  his  corporate  franchise.' 

It  has,  in  one  or  two  cases,  been  doubted  whether  member- 
ship in  an  incorporated  society  which  is  purely  literary,  social, 
scientific,  benevolent  or  religious,  and  owns  no  property,  is 
such  a  right  as  the  court  will  protect,  and  whether  the  right  of 
meeting  the  other  members,  and  enjoying  their  companionslnp, 
is  such  a  vested  right  as  courts  will  take  cognizance  of.^ 

But  it  is  clearly  settled,  both  upon  principle  and  authority, 
that  the  franchise  which  is  vested  in  each  member  of  a  cor- 
poration, is  a  vested  right  and  privilege  which  the  courts 
will  not  permit  such  societies  to  abuse  or  destroy.  In  this 
country  the  franchise  is  granted  by  the  State,  and  it  will  be 
presumed  in  the  courts  of  the  State  that  its  grant  is  of  value 
to  its  citizens. 

Thus,  in  Fuller  v.  Trustees  of  Plainiield  Academy,  6  Conn. 
532,  it  was  held  that  the  place  of  trustee  in  an  eleemosynarj^ 
corporation,  though  no  emoluments  are  attached  to  it,  is  yet  a 
franchise  of  such  a  nature  that  a  person  improperly  dispos- 
sessed of  it  is  entitled  to  restoration,  and  a  peremptory  man- 
damus was  awarded. "* 

Such  a  franchise  is  an  incorporeal  hereditament.  All  im- 
munities and  franchises  are  deemed  valuable  in  law;  and  the 
owners  have  a  legal  estate  and  property  in  them,  and  legal 
remedies  to  support  and  recover  them,  in  case  of  any  injury  to,. 
or  obstruction  of  them. 

§  49.  Proper  remedy  of  expelled  iiieiiiber  for 
reiiistateinent.      In  case  of  illegal  disfranchisement  of  a 

'People  V.  Mechanics' Aid  Society  wealth,    52    Pa.  St.     125;     Smiths 

22  Mich.    86;  State  v.   Chamber  of  Society  v.  Vandyke,  2  Whart.  (Pa.) 

Commerce,  20   Wis.  63;   Common-  308. 

Avealth    V.  C4erman  Society,  15   Pa.  ^People  ex  rel.  Rice  v.   Board  of 

St.  251;  People  V.   Medical  Society,  Trade,  80  111.  134;  Waring  v.  Medi- 

24   Barb.    570 ;    Commonwealth    "v.  cal  Society,  8  Am.  L.  Pteg.  533. 

Guardians  of  Poor  etc.,  6  Sar.  &   R.  *  See  also  State  ex  rel.  Waring  v. 

469 ;    Commonwealth  v.    Pa.  Beneli-  ]\tedical    Society,   38   Ga.   608,   and 

cial  Society,  2  Sar.  &  R.,  141 ;  Com-  many  of  the  authorities  reviewed  in. 

monwealth  v.  St.  Patrick's  Ben.  Soc.  this  chapter. 
3  Binney  448 ;  Society  v.   Common- 


Chap.  3,  §^0.]  membership.  5&* 

member  of  an  incorporated  society,  mandamus  is  the  proper 
I'emedy  for  liis  restoration.     This  is  the  settled  modern  rule.' 

In  Commonwealth  v.  Mayor,  etc.,  5  Watts,  152,  it  is  said  r 
"  An  action  to  enforce  the  right  could  not  be  maintained 
against  the  corporation,  because  perfoi-mance  of  a  corporate- 
function  is  not  a  duty  to  be  demanded  by  action  ;  and  unless 
recourse  could  be  had  to  the  functionary  in  the  first  instance, 
the  relator  might  have  a  cause  for  redress  without  a  remedy."" 

The  discharge  of  a  corporate  duty  is  treated  as  an  office  or 
function,  and  the  corporation  as  a  functionary. 

A  corporate  society  having  been  created,  invested  with  cer- 
tain powers,  and  charged  with  certain  duties  to  be  performed 
for  the  benefit  of  its  members  and  the  public,  is  not  a  private- 
individual,  in  the  ordinary  sense  of  the  word,  so  that  an  action 
which  would  be  a  sufficient  remedy  between  individuals  to- 
enforce  private  rights,  would  be  a  sufficient  remedy  against  it. 

A  member  of  an  incorporated  society,  whose  rights  are 
withheld,  or  violated  by  the  society,  and  who  is  without  other 
remedy,  is  entitled  to  the  writ  of  mandamus. 

When  a  member  has  been  expelled  from  a  society,  and  seeks 
to  be  restored  to  membership,  it  is  necessary  for  him  to  show, 
both  in  pleading  and  in  evidence,  that  he  was,  at  some  time,  a 
member  of  the  society.  If  he  shows  that  the  society,  at  some 
time,  recognized  him  as  a  member,  this  is  sufficient  to  cast 
upon  the  society  the  burden  of  showing  a  legal  expulsion  of 
the  member. 

Where  a  society  is  proceeded  against  by  a  name  not  inap- 
propriate as  a  corporate  designation,  and  the  application  is 
resisted  by  it  in  that  name,  and  no  denial  of  its  corporate 
character  is  contained  in  the  papers,  it  will  be  presumed  that 
it  is  in  fact  a  corporation,  and  that  the  use  of  the  writ  of  man- 
damns  is  ])ro])er.^ 

In  ju'oceedings  for  reinstatement  of  a  member,  it  is  a  ques- 
tion of  fact,  whether  any,  and,  if  any,  what  ]>roceedings  in 
expulsion  took  place  in  the  society,  but  wliether  the  expulsion 
was  in  accordance  with  the  constitution  and  by-laws  of  the 
society,  is  a  question  of  law  fur  the  court  to  determine.' 

'Medical  Society  v.  Weatherly,  75  705,  698:  State  v.  Chamber  of  Com- 

Ala.,  248:   People  v.  Benevolent  So-  merce,  20  "Wis.,  Go. 
cietv,  3   Hun.  3G1;    State  v.  Georijia        'People  v.  Benevolent  Society,  3^ 

Medical  Society,  38  Ga.,  608;    P'eo-  Ilun,  361. 

pie  V.  Medical  Society,  24  Barb.,  570;         -'Osceola  Tribe,   etc,   v.   Bost,   15- 

Angell  tS:  Ames  on  Corp.,Sectiou  704,  Md.,  2'JO. 


60  MEiruERSirip.  [Chap.  3,  §50. 

§  50.     Maiidaiuus    a    discretionary    writ.      The 

issuing  of  a  peremptory  writ  of  iiiandainus  is  discretionary 
with  the  court. 

J3y  this  it  is  not  meant  that  the  court  may  arbitrarily  deny 
the  writ  to  a  person  seeliing  restoration  to  membership  in  an 
incorporated  society,  but  it  is  meant  that  a  court,  in  the  ex- 
ercise of  a  sound  discretion,  may  deny  the  writ  to  a  person 
technically  entitled  to  it,  where  it  is  aj^parent  from  the  evi- 
dence in  the  case  that  the  person  is  not  entitled,  in  good 
conscience,  to  the  protection  of  the  court,  or  that  reinstate- 
ment to  membership  would  be  useless  to  such  person. 

Where  a  member  was  twice  notified  to  appear  before  a 
tribunal  of  the  society  to  answer  charges,  and  he  appeared 
twice,  and  broke  up  the  meetings,  the  court  refused  to  reinstate 
him,  where  it  appeared  that  he  had  been  expelled  at  a  third 
meeting  without  notice  to  him,' 

The  court  will  not  order  a  peremptory  writ  to  issue,  restor- 
ing a  relator  to  membership  in  an  incorporated  society,  where 
it  is  plain  from  the  testimony  that  the  members  thereof  may 
at  once  expel  him  in  the  manner  pointed  out  and  agreed  upon 
in  the  laws  of  the  society. 

The  power  of  expulsion,  under  the  rules  of  a  society,  existed 
only  in  case  of  a  member  wrongfully  reporting  himself  sick. 
A  member  was  expelled  on  charges  of  disorderly  conduct, 
abuse  of  family,  and  calling  the  chairman  of  the  committee  on 
sickness  a  liar.  The  committee  to  whom  the  charges  were 
referred  examined  witnesses  to  show  that  the  relator  was 
drunk,  instead  of  sick,  while  lie  was  drawing  benefits,  and  their 
report  treated  this  conduct  as  coming  within  the  charge.  The 
statements  of  the  witnesses  Avere  annexed  to  the  charges,  giv- 
ing point  to,  and  explaining  them,  and  the  relator  had  notice 
and  opportunity  to  defend.  The  minutes  of  the  meeting 
recited  that  he  was  accused  of  having  wrongfully  drawn 
benefits. 

Upon  the  trial  witnesses  were  heard  in  presence  of  the 
accused,  and  he  had  opportunity  to  cross-examine  them. 

Upon  these  facts,  the  court  said  :  "  Irregularity  not  suffici- 
ent to  deprive  the  relator  of  the  full  advantage  of  his  oppor- 
tunity to  defend,  would  scarcely  warrant  a  court,  in  the 
exercise  of  its  discretion,  to  interfere  by  a  peremptoiw  writ, 

'State  ex  rel.  v.  Portua^ese  Society,  for  Sunport  of  the  Sick,  etc.,  5  Cin. 
15  La.  Ann.  73.  "  Law  Bull.,  124. 

■^State  ex  rel.   Becker  v.    Society 


[Chap.  3,  ^51.]  membership.  01 

since  if  the  objection  be  simply  to  the  irreii^ularity  of  tlie  ex- 
pulsion, a  restoration  to  membership  would  leave  the  relator 
liable  to  be  expelled  by  a  subsequent  proceeding.'" 

§   51.     Delay    in    applying-   for    restoration   to 

membership.  A  member  who  lias  been  illegally  expelled 
from  a  society,  should  apply  for  reinstatement  at  once,  if  at 
all.  Seeming  acquiescence  in  his  expulsion  is  of  itself  un- 
favorable to  his  claim  for  restoration;  for  it  is  reasonable  to 
suppose  that  he  will  at  once  move  in  the  direction  of  recover- 
ing his  lost  rights  and  privileges,  if  he  entertains  a  sense  of 
injustice  and  wrong  when  he  is  expelled. 

AVhere  a  member  for  nineteen  years  after  he  was  dropped 
from  the  roll  of  members,  paid  no  dues,  took  no  interest  in 
the  affairs  of  the  society,  and  attended  none  of  its  meetings, 
the  court  refused  to  inquire  into  the  legality  of  his  expulsion, 
and  dismissed  his  application  for  restoration  to  membership. 
Even  arbitrary  and  illegal  expulsion  may  be  accepted  bv  a 
member,  and  where  he  neglects  to  prosecute  his  right  to  "re- 
storation to  membership,  for  an  unreasonable  length  of  time, 
the  court  may  properly  refuse  to  interfere  in  his  behalf.  The 
writ  of  niandaimis  is  discretionary,  and  may  properly  be 
denied  because  of  such  unreasonable  lapse  of  time." 

In  Bachman  v.  K.  Y,  Deutcher  Arbeiter  Bund.  64  How. 
Pr.  (N.  Y.)  44:2,  the  fact  that  the  member  had  waited  for  six 
years  to  apply  for  restoration  was  commented  upon  unfavor- 
ably, though  the  case  was  decided  upon  another  point. 

in  Pulford  v.  Fire  De})artment,  etc.  31  Mich.  458,  the  de- 
lay in  making  application  for  restoration,  and  the  non-pay- 
ment of  dues  to  the  society,  were  accounted  for  by  the  absence 
of  the  member  in  the  army  during  the  war  of  the  rebellion. 

In  State  ex  rel.  Dindorf  v.  Algemeiner  Deutcher  Baecker 
Gewerbe  Verein,  3  Cin.  Law  Bull.  21)5,  the  writ  of  manda- 
mus was  denied,  and,  in  giving  the  reasons  for  such  denial, 
the  court  says:  "Another  consideration  in  tlie  case  was  that 
the  ex])ulsion  complained  of  occurred  in  1876,  and  the  minutes 
showed  that  when  he  was  expelled  the  relator  left  the  society, 
saying  it  was  "all  right;"  and  it  would  seem,  from  the  fact 
of  his  delaying  so  long  (al)out  two  years)  to  make  ajiplication 
for  this  writ,  that  he  continued,  for  a  considerable  space  of 
time,  to  think  it  was  all  right." 

'State    ex    rel.   Dindorf   v.   Al^e-        ^  Bostwick  v.  Fire  Dejiartment,  4^ 
meiner  Deutcher  Baecker  Gewerbe     Mich.  513;  14  N.  W.  Kep.  501. 
Verein,  3  Cin.  Law  Bull.,  295. 


■62  MEMBERSHIP.  [Chap.  3,  §52. 

§  52.  Return  to  writ  of  maiidamus.  T]ie  return 
to  a  manduDius  to  reinstate  a  member  of  an  incorporated  society 
must  distinctly  set  forth  all  the  facts  relating  to  the  expul- 
sion, in  order  that  the  court  may  judge  of  its  sufficiency,  both 
as  to  the  cause,  and  the  form  of  the  proceedings.  It  must  show 
the  cause  of  the  expulsion,  notice  to  the  person  expelled,  such 
as  will  give  him  an  opportunity  to  be  heard,  and  such  as  con- 
forms to  the  provisions  on  the  subject  in  the  contract  of  mem- 
bership, the  assembly  of  a  proper  tribunal,  the  proceedings 
before  them,  a  conviction  of  the  offense,  and  an  actual  expul- 
sion by  the  society.* 

These  requirements  are  in  harmony  with  the  well  settled 
principle,  that  in  all  cases  of  special  and  limited  authority, 
especially  when  it  is  penal  in  character,  and  to  be  exercised  in 
derogation  of  the  common  law,  great  strictness  and  jealousy 
is  to  be  exercised,  not  only  in  construing  the  law,  but  in  can- 
vassing the  proceedings. 

Proceedings  to  disfranchise  a  member  must  be  strictly  con- 
strued, for  a  removal  being  an  act  of  an  odious  nature,  all 
clauses  concerning  it  must  receive  a  strict  interpretation.' 

Where  the  charter  expressly  requires  that  charges  against  a 
member  shall  be  proved  by  two  or  more  credible  witnesses, 
the  return  must  state  specifically  that  tlie  charges  were  either 
proved  on  oath  by  two  such  witnesses,  or  that  they  were 
confessed.' 

And  where  the  charter  expressly  requires  that  a  charge 
ao"ainst  a  member  shall  be  made  by  certain  officers  of  the 
society,  and  be  signed  by  them,  the  return  must  show  that  the 
■charge  was  so  made  and  signed." 

The  facts  must  be  set  forth  distinctly  and  certainly,  not 
argumentatively,  inferentially,  or  evasively. 

A  return  is  insufficient,  which  states  that  the  relator  was, 
according  to  the  constitution  and  by-laws  of  the  society,  "tried 
and  convicted  of  the  charges,"  without  showing  that  the 
society  took  proof  s  which  were  deemed  to  be  sufficient  evidence 
of  the  truth  of  the  charges.' 

A  return  is  insufficient,  which  states  merely  that  the  expelled 

'Commonwealth  v.   German   So-  "Will  on  Corp.  pt.  2  Sec.  240,  pt.  1. 

cietv,  15  Pa.  St.  251.  Sec.  702. 

«  Rex  V.  Sutton,  10  ISlod.  76.  *  Society  v.  Commonwealth,  52  Pa.- 

3  Aug.  &  A.  on  Corp.  Ch.  29  Sec.  8.  St.  125. 

King    V.   Mayor,    etc.   5  Mod.    25;  '  Society  y.  Meyer,  52  Pa.  St.  125. 
Kino;  v.  Faversham,    8   T.  R.    356. 


•Chap.  3,  §53.]  membeksiiip.  63 

member  was    present  when  the  charge  was  made,  and  did 
not  deny  it;  it  should  appear  that  the  charge  was  proved.' 

§  53.  Charg^es  preferred  ag:aiiist  a  lueiiiber  of 
an  incorporated  society.  Wliere  the  constitution  of  an 
incorporated  vohmtary  society  makes  "  slander  against  the  so- 
ciety" by  a  member  an  offense  for  which  he  may  be  lined  or 
■expelled,  it  will  be  held  that  an  offense  something  analagous 
to  the  common  law  offense  of  slander,  as  applicable  to  individ- 
uals, is  intended ;  and,  in  a  proceeding  to  enforce  such  a  pro- 
vision, unless  the  words  charged  to  be  slanderous  are  set  fortli, 
it  cannot  be  known  whether  there  is  any  jurisdiction  to  make 
,the  inquiry.^ 

If  the  return  to  the  mandamus  states  in  general  terms  that 
the  member  was  expelled  for  violation  of  duty,  without  speci- 
fying the  charges  on  which  he  was  convicted,  it  is  bad.^ 

Under  articles  of  association  providing  for  expelling  mem- 
bers "  guilty  of  improper  conduct  calculated  to  bring  the 
society  into  disrepute,"  charges  were  preferred  against  a 
member;  firsts  of  receiving  of  an  applicant  for  admission  his 
proposed  initiation  fee,  and  failing  to  pay  it  over  to  the  society, 
or  to  return  it  to  the  applicant,who  had  complained  tliereof  to 
various  persons;  and,  second^  of  having  been  entrusted  by  the 
secretary  with  the  keys  of  the  society  chest,  to  obtain  a  receipt 
book  therefrom,  and  of  having,  at  the  same  time,  and  without 
leave,  taken  from  such  chest  the  original  roll  of  the  society, 
and  refusing  to  return  it. 

It  was  held  that  the  above  provision  covered  cases  of  mis- 
conduct injurious  to  the  society,  and  damaging  to  the  repu- 
tation of  the  person  charged,  and  that  the  charges  were 
sufficient.'' 

Where  the  articles  of  incorporation  authorize  the  expulsion 
of  a  member  for  being  concerned  in  scandalous  or  improper 
proceedings,  which  may  injure  the  reputation  of  tlie  society, 
it  is  a  good  cause  of  expulsion,  that  a  member,  claiming  relief 
from  the  society,  had  altered  a  pliysician's  bill  from  f(jur  dol- 
lars to  forty,  and  liad  ])resented  that  bill  to  the  society  as  evi- 
dence of  liis  claim." 

'  King  V.  Faversham,  8  T.  R.  35(5.  the  Poor,  6  Sar.  \'  R.  (Pa.)  469. 

Peoi^le  V.   Benevolent  Society,    65  *  Burton  v.  St.  George  Society,  28 

Barb.  357.  Mich.  261. 

^  Roehler  v.  Mechanics'  Aid  Soci-  *  Commonwealth  v.  Philanthropic 

ety,  22  Mich. 86.  Society,  5  Biiuiey  486. 

^Commonwealth  v.  Guardians   of 


64  MEMUEKSiiir.  [CiiAP.  3,  §53, 

111  Fuller  v.  Trustees  of  the  Academic  School,  etc.,  6  Conn. 
532,  the  charges  were,  first;  indecorous  and  improper  expres- 
sions respecting  the  board  of  trustees,  in  charging  the  mem- 
bers of  the  board  with  being  governed  in  their  official  acts  by 
a  spirit  of  sycophancy,  secondly;  neglect  of  official  duty,  in 
not  performing  his  duty  as  one  of  a  committee  of  the  board  of 
trustees  in  relation  to  one  of  its  concerns.  The  court  held 
that  though  the  charges,  if  true,  subjected  the  accused  to  the 
censure  of  all  honorable  men,  they  were  insufficient  as  causes 
of  expulsion  from  the  society,  under  its  inherent  power  of  ex- 
pulsion. 

The  charge  that  a  member  of  an  incorporated  society  had 
"  assisted  as  president  of  the  society  in  defrauding  the  society 
out  of  the  sum  of  lifty  cents,"  without  stating  in  what  manner 
he  had  assisted  in  defrauding  the  society,  under  what  circum- 
stances of  time  and  place,  and  w^itliout  even  stating  that  he 
had  designedly  assisted  in  the  alleged  fraud,  is  too  vague  and 
general  to  be  sufficient. 

And  the  charge  that  he  had  been  guilty  of  "  defaming  and 
injuring  the  same  in  public  taverns,"  is  equally  vague  and  in- 
delinite.'' 

In  State  v.  Georgia  Medical  Society,  38  Ga.  608,  the  offense 
charged  consisted  in  the  fact  that  the  relator  became  one  of 
the  sureties  on  the  official  bond  of  a  colored  citizen  of  his 
county,  who  had  been  elected  clerk  of  the  Superior  Court  of 
the  county,  by  a  majority  of  the  legal  votes  cast  at  the  election 
for  that  office,  and  in  the  further  fact  that  he  became  surety  on 
the  bonds  of  certain  other  colored  citizens  who  were  charged 
with  the  offense  of  riot,  for  their  appearance  at  court  to  answer 
tlie  charge  as  the  law  directs.  The  charge  was  "  ungentle- 
manly  conduct,"  contrary  to  the  by-laws  passed  under  author- 
ity of  the  charter.  The  court  held  the  offense,  as  charged, 
insufficient  and  said:  "He  was  expelled  for  doing  that  which 
the  law  of  this  State  not  only  authorizes,  but  encourages.  The 
very  fact  that  the  law  requires  the  clerk  of  the  Superior 
court  to  give  bond  and  security  for  the  faithful  discharge  of 
his  duties,  is  sufficient  to  justify  any  citizen  of  the  county 
in  becoming  one  of  his  sureties,  and  protect  him,  in  contem- 
plation of  law,  from  the  imputation  of  having  forfeited  his- 
position  as  a  gentleman  by  so  doing." 

*  Commonwealth  v.  German  Soci- 
ety, 15  Pa.  St.  251. 


Chap.  3,  §54.]  membership.  65 

§  54.  Same  subject  continued.  Where  the  rules  of 
an  incorporated  society  forbid  a  member  to  commence  a  suit 
at  law  against  another  member  "  except  the  case  be  of  such  a 
nature  as  to  require  and  justify  a  process  at  law,"  it  is  not 
sufficient,  in  a  return  to  a  mandamus,  to  merely  state  the  rule, 
and  aver  that  the  expelled  member  had  commenced  a  suit  at 
law.  It  should  also  be  averred  that  "  the  case  was  not  of  such 
a  nature,"  etc' 

The  charter  declared  the  objects  of  the  association  to  be, 
among  other  things,  "  to  adjust  controversies  between  its 
members,  and  to  establish  just  and  equitable  principles  in  the  ' 
cotton  trade,"  and  gave  it  power  to  make  all  proper  and  need- 
ful by-laws,  not  contrary  to  the  constitution  and  laws  of  the 
State  of  New  York,  or  of  the  United  States,  and  "  to  admit 
new  members,  and  expel  any  member  in  such  manner  as  may 
be  provided  by  the  by-laws."  The  by-laws  provided  for  ex- 
pulsion for  improper  conduct,  but  did  not  state  what  should 
be  considered  as  such. 

There  was  no  express  or  implied  authority  conferred  upon 
the  association  by  its  charter  or  by-laws,  to  try  the  title  to  a 
seat  in  the  exchange,  and  to  determine  who  was  the  owner  of 
a  right  of  membership  in  dispute. 

A  member  asserted  his  ownership  of  a  right  to  a  seat  which 
had  formerly  belonged  to  an  expelled  member,  and  the  associ- 
ation claimed  that  the  right  of  membership  had  been  forfeited, 
and  was  subject  to  sale  by  it.  A  committee  charged  with  the 
investigation  of  this  controversy  decided  adversely  to  the  mem- 
ber's claim  of  ownership.  He  then  commenced  an  action 
against  the  association,  and  obtained  an  injunction  restraining 
it  from  selling  the  right  of  membership.  For  this  act  he  was 
arraigned  and  expelled. 

The  court  held  that  he  was  not  guilty  of  improper  conduct 
warranting  his  expulsion  for  resorting  to  the  courts  to  prevent 
the  association  from  disposing  of  such  a  right  of  membership; 
that  he  was  not  acting  in  antagonism  to  the  corporate  power 
of  "adjusting  controversies  between  its  members"  or  of  "  es- 
tablishing just  and  equitable  principles  in  the  cotton  trade," 
but  was  asserting  a  right  secured  to  him  by  the  fundamental 
law  of  the  land." 

AVhere  the  rules  of  a  board  of  broker's  provided  that  if  any 
member  should  refuse  to  comply  with  his  stock  contracts,  he 

'Green  v.  Society,  1  Sur.  &  R.  ^  People  ?j; /-e^  v.  N.  Y.  CottouEx- 
(Pa.)  254.  change,  8  Hun  N.  Y.  216. 


66  MEMBERSHIP.  [Chap.  3,  §54. 

should  be  expelled,  it  was  held  not  to  be  a  sufficient  charge 
that  a  member  had  refused  to  comply  with  a  contract  for  the 
sale  of  oil  lands.' 

It  is  not  a  proper  cause  for  expulsion  tliat  prior  to  the  ad- 
mission of  a  person  to  membership  in  a  society,  he  conducted 
himself  in  such  a  manner,  and  performed  such  acts,  as  would 
justify  the  expulsion  of  a  member  for  breach  of  his  corporate 
duty.  Persons  who  are  not  members  of  a  society  are  not 
bound  to  observe  its  laws,  and  cannot  be  said  to  break  its  laws 
by  any  of  their  acts. 

Where  a  physician,  before  he  became  a  member  of  a  medi- 
cal society,  advertised  his  ability  to  effect  cures  in  certain  dis- 
eases, etc.,  it  was  held  that,  as  he  was  not  amenable  to  the 
laws  of  the  society  at  the  time  he  procured  these  advertise- 
ments to  be  published,  the  society  had  no  jurisdiction  to  try 
him  for  the  offense.'^ 

A  member  of  a  lire  department  failed  to  pay  his  dues  to  the 
corporation  for  a  long  period  of  time,  and  the  society  passed 
a  by-law  providing  that  anyone  who  had  been  in  arrears  for 
dues,  for  a  certain  length  of  time,  should  be  expelled.  The 
member  was  at  once  expelled,  but  the  court  held  the  charge 
insufficient,  and  the  by-law  void,  as  being  in  the  nature  of  an 
'ex  post  facto  law.' 

'Leech  v.  Harris.,  2  Brewster  Y.  188;  In  re  Newell  Smith,  10 
(Pd.)  571.  Wend.  447. 

-People  V.  Medical  Society,  32  N.        ^Pulford  v.  Fire  Departmentt,  31 

Mich.  458. 


Chap.  3,  §55.]  membership.  67 


Sec. 

55. 

8ec. 

56. 

Sec. 

57. 

Sec. 

58. 

Sec. 

59. 

■Sec. 

HO. 

Sec. 

61. 

Sec. 

m. 

Sec. 

63. 

Sec. 

64. 

Membership.— Part  III. 

Unincorporated  Societies. 


[inherent  power  of  unincorporated  society  to  expel  members. 

Right  of  unincorporated  societies  to  pass  by-laws  providing 
for  the  expulsion  of  members.  Effect  of  such  by-laws  on 
protesting  minority,  etc. 

Power  of  expulsion  by  long  and  immemorial  usage. 

t  Expulsion  of  members  agreed  upon  in  contract  of  association. 

|-  Reinstatement  to  membership  in  unincorporated  society. 

Proper  remedy  of  expelled  member. 

Charges  against  a  member  of  an  unincorporated  society. 

§  55.  Inherent  power  of  unincorporated  society 
to  expel  members.  In  the  absence  of  any  provision  in  the 
constitution  or  by-laws  of  an  unincorporated  society,  givinc]^  to 
the  members  the  power  of  expulsion,  there  is  no  inherent 
power  in  the  majority  to  expel  a  member. 

The  society,  as  such,  has  no  legal  entity,  and  it  would  be 
manifestly  absurd  to  say  that  it  had  the  power  of  self-preserva- 
tion. The  written  contract  of  association  expresses  the  terms 
on  which  the  members  meet  together,  and  is  the  law  govern- 
ing the  members  in  their  relations  toward  each  other.  There 
is  the  greatest  possible  latitude  given  to  the  members  to  agree 
upon  the  terms  upon  which  they  shall  associate,  but  the  law 
will  supply  no  provisions  in  the  articles  of  association.  In 
the  absence  of  an  agreement  that  it  may  l)e  done,  the  majority 
may  not  ex])el  the  minority  of  an  unincorporated  society.' 

It  is  sometimes  said  that  this  is  the  English  rule,  but  that, 
in  this  country,  the  inherent  power  of  such  societies  to  ex])el 
their  members  is  recognized,  and  may  be  exercised  for  the 
same  causes  as  in  incorporated  societies.  The  case  of  Leech 
V.  Harris,  2  Brewster  (Pa.)  571,  is  cited  as  the  authority  for 
the  so  called  American  doctrine. 

In  the  iirst  place,  the  o})inion   expressed  in  that  case,  about 

'Dawkins  v.   Antrobus,   L.  R.    17 
Chan.  Div.  615. 


68  MEMBERSHIP.  [Chap.  3,  §56. 

which  the  court  had  "  v^ery  little  douht,"  is  a  mere  dictum^ 
and  then,  the  ground  upon  which  the  court  predicated  the 
opinion  was  that  unincorporated  societies  were  given  a  legal 
existence,  and  were  placed  under  the  supervision  of  the  courts 
by  the  laws  of  Pennsylvania.  And  in  White  v,  Brownell,  4 
Abb.  Pr.  N.  S.  162;  2  Daly  329,  it  is  said,  that  "where  they 
(unincorporated  societies)  have  no  regulation  upon  the  subject 
they  may  expel  a  member  by  a  vote  of  the  majority,  if  he  has- 
been  notified  of  the  charge  against  him  and  afforded  an  oppor- 
tunity of  being  heard  in  his  defense,  citing  Innes  v.  Wvlie,. 
1  Car.  &  Kir.  262." 

The  range  of  discussion  is  wide  in  the  case  of  White  v. 
Brownell,  and  the  opinion  is,  in  many  respects,  exceedinglj 
valuable.  The  language  quoted  is,  however,  entirely  outside 
of  any  questions  in  the  record.  The  case  of  Innes  v.  Wylie  is  an 
English  case  which  holds  that  a  member  may  not  be  expelled 
from  a  society  without  notice,  and  that  damages  for  depriva- 
tion of  rights  of  membership  can  only  l)e  recovered  in  cer- 
tain cases.  The  court  begins  its  opinion  by  saying:  "  I  am  of 
opinion  that  where  there  is  not  any  property  in  which  all  the 
members  of  a  society  have  a  joint  interest,  the  majority  may 
by  resolution  remove  any  one  member."  The  majority  can 
remove  a  member  in  such  a  case,  and  he  will  be  without  re- 
medy, because  the  courts  w^ill  not  exercise  jurisdiction  to  rein- 
state a  member,  merely  that  he  may  enjoy  the  right  to  meet 
with  other  members,  but  the  majority  may  not  remove  him, 
for  it  is  fundamental,  as  will  hereafter  more  fully  appear,  that 
the  majority  must  proceed  according  to  the  rules  of  the  society. 
Having  no  rules,  how  may  they  proceed  in  the  matter? 

§  56.  Same  subject  coiitiiiiied.  In  Otto  v.  Jour- 
neyman Tailors'  Protective  and  Benevolent  Union,  Cab;  17 
Pac.  Pep.  217,  the  charge  upon  which  the  member  was  ex- 
pelled from  an  unincorporated  society  was  that  he  had  been 
guilty  of  a  conspiracy  to  injure  and  destroy  the  society.  The 
constitution  provided  as  follows:  "  If  any  member  defraud  this 
union,  he  shall  be  dealt  with  as  the  central  body  may  decide."' 
Beyond  this  no  specific  provision  appeared  in  the  constitution 
or  by-laws,  under  which  members  might  be  expelled.  Tlie 
contention  of  the  society  was  that  the  power  of  expulsion  is 
inherent  in  every  society,  and  that  the  offense  of  which  the 
member  was  found  guilty  was  sufficient  ground  for  expulsion,, 
as  matter  of  law,  irrespective  of  any  provision  of  the  constitu- 
tion or  by-laws.     The  member  was  reinstated  to  membership 


Chap.  3,  §56.]  membership.  69 

upon  the  ground  that  the  facts  in  the  case  raised  the  inevita- 
ble conchision  that  the  trial  and  conviction  of  plaintiff  was  a 
travesty  upon  justice,  and  lacking  in  the  essential  elements  of 
fairness,  good  faith,  and  candor,  which  should  characterize  the 
action  of  men,  in  passing  upon  the  rights  of  their  fellow-men. 

But  in  the  opinion  the  court  subscril)es  to  the  proposition 
that  there  is  an  inherent  right  of  expulsion  in  everrf  society, 
and  says: 

"The  right  of  expulsion  from  associations  of  this  character 
may  be   based  and  upheld  upon  two  grounds : 

First,  a  violation  of  such  of  the  established  rules  of  the 
association  as  have  been  subscribed  or  assented  to  by  the 
members,  and  as  provide  expulsion  for  such  violation. 

Second,  for  such  conduct  as  clearly  violates  the  fundamental 
objects  of  the  association,  and,  if  persisted  in  and  allowed, 
would  thwart  those  objects,  or  bring  the  association  into  dis- 
repute. We  content  ourselves  with  stating  the  propositions 
thus  broadly,  and,  for  the  purposes  of  this  case,  need  not  refer 
to  the  numerous  authorities  defining  and  limiting  the  power." 

It  is  evident  from  this  language  that  the  expulsion  would 
have  been  sustained  by  the  court,  had  it  not  found  that  malice 
and  bad  faith  were  the  motives  which  prompted  it.  While 
this  case  is  not  an  authority  in  favor  of  the  proposition  that 
unincorporated  societies  have  an  inherent  power  of  expulsion, 
it  indicates  very  decisively  the  opinion  of  the  court  upon  the 
question. 

Where  the  contract  of  association  is  silent  as  to  the  expulsion 
of  its  members,  and  a  minority — whether  one,ormore — defrauds 
the  members,  or  performs  acts  against  the  objects  and  purposes 
for  which  tlie  members  associated,  the  remedy  is  by  dissolu- 
tion, and  distribution  of  the  jn-operty  among  the  members. 

It  is  within  the  power  of  the  members  to  provide  the  remedy 
of  expulsion,  and  thus  to  preserve  the  association  from  dissolu- 
tion in  such  cases,  but  the  law  will  not  interpolate  into  the 
contract  of  the  associates  a  provision  supplying  such  a  remedy. 

The  true  rule  is  laid  down  in  White  v.  Brownell,  3  Abb. 
Pr.  N.  8.,  318,  where  it  is  said:  "As  this  association  is  not 
organized  in  pursuance  of  any  statute,  nor  are  the  terms  of 
membership  iixed  by  principles  of  the  common  law,  it  follows 
that  the  agreement  which  the  members  make  among  them- 
selves on  the  subject,  must  establish  and  determine  the  rights 
of  the  parties  on  the  subject.  The  constitution  of  the  associa- 
tion and  its  laws  agreed  upon  by  the  members,  contain  all  the 


TO  MEMBERSHIP.  [ChAP.  3,  §57. 

stipulations  of  the  parties  and  form  the  law  which  should 
govern.     The  members  have  established  a  law  themselves." 

§  57.  Rig-lit  of  viiiincorporated  societies  to  pass 
l>y-laws  providing  for  expulsion  of  members. — 
Effect  of  such  by-laws  on  protesting  minority,  etc. 

When  a  person  becomes  a  member  of  an  unincorporated 
society,  he  is  bound  by  the  laws  of  the  society  as  they  exist 
at  the  time  of  his  admission.  If,  by  the  contract  of  association, 
the  majority  has  power  to  make  and  alter  rules  affecting  the 
general  interests  of  the  society,  he  is  bound  by  such  by-laws 
as  may  thereafter  be  passed  concerning  expulsion  of  members. 
But  if  the  contract  of  association  is  silent  as  to  future  legisla- 
tion by  the  members,  he  is  not  bound  by  subsequent  by-laws, 
unless  he  voted  for  them,  assented  to  them,  or  in  some  way 
acted  upon  them.  There  is-  no  inherent  right  in  an  unincor- 
porated society  to  pass  by-laws  for  the  expulsion  of  members. 

In  Dawkins  v.  Antrobus,  L.  R.  17  Chan.  Div.  615,  the 
question  was  as  to  whether  a  by-law,  under  which  a  member 
had  been  expelled,  was  binding  upon  him  as  a  member  of  a 
certain  club.  The  court  said:  "  Now  that  does  not  depend 
on  the  inherent  power  of  a  club  to  pass  a  rule  to  expel  one  or 
more  of  its  members;  I,  for  one,  am  unaware  of  the  existence 
of  such  a  power,  and  I  was  surprised  to  hear  such  a  proposi- 
tion put  forward.  There  is  no  more  inherent  power  in  the 
members  of  a  club  to  alter  their  rules  so  as  to  expel  one  of  its 
members  against  the  wishes  of  the  minority,  than  there  is  in 
the  members  of  any  society  or  partnership  which  is  founded 
on  a  contract,  that  written  contract,  of  course,  expressing  the 
terms  on  which  the  members  associate  together;  and  it  is  in- 
tolerable to  imagine  that  the  majority  should  in  such  a  case 
claim  an  inherent  power  of  expelling  the  minority.  I  say 
this  because  that  has  been  a  matter  pressed  upon  me  as  if 
capable  of  argument.     I  think  it  is  not." 

Where  the  articles  of  association  are  silent  upon  the  power 
of  future  legislation,  a  protesting  minority  are  not  bound  by 
the  acts  of  a  majority  in  passing  by-laws. 

§  58.  Power  of  expulsion  by  long  and  imme- 
morial usage.  It  is  undoubtedly  true  that  some  unin- 
corporated societies  which  have  existed  for  many  years,  either 
as  a  certain  and  definite  class,  or  as  individual  societies,  have 
the  right  to  inquire  into  the  conduct  of  their  members,  and  the 
power  to  expel  them  for  certain  offenses,  whether  this  right 


Chap.  3,  §58.]  membership.  71 

and  power  is  specially  conferred  by  the  contract  of  member- 
ship, or  not. 

Churches,  for  instance,  may  expel  their  members  for  im- 
moral and  scandalous  conduct.  This  power  is  established  by 
long  and  immemorial  usage;  and  when  the  usage  has  been 
proved,  the  law  will  presume  the  existence  of  provisions  in 
every  contract  of  membership  in  a  church,  giving  to  it  this 
power  of  expulsion,  and  will  also  presume  that  the  member 
joined  the  churcli  well  knowing,  and  assenting  to,  the  recog- 
nized power  of  expulsion  in  the  body  of  the  church. 

It  must  be  remembered  that  the  contract  of  membership  in 
a  church  is  not  a  written  contract;  it  arises  from  admission 
into  fellowship  with  a  large  and  indefinite  body  governed  by 
certain  customs  and  usages ;  it  is,  at  most,  a  contract  partly  in 
writing  and  partly  constituted  of  these  customs  and  usages. 
It  differs  from  a  contract  of  membership  wherein  all  the  con- 
ditions of  membership  are  specifically  set  forth. 

But  even  in  a  church,  this  power  of  expulsion  is  not  to  be 
regarded  as  an  inherent  power,  but  must  be  said  to  be  a  power 
arising  from  usage  and  custom  which  implies  the  existence  of 
an  unwritten  by-law  conferring  the  power  upon  the  church. 
And  an  inherent  power  is  vastly  different  from  one  which  is 
conferred  by  a  custom.  It  requires  no  evidence  to  establish 
the  existence  of  an  inherent  power,  but  a  custom  must  be 
proved  as  any  other  fact. 

It  would  be  exceedingly  difficult  to  prove  a  custom  that 
would  sustain  the  expulsion  of  a  member  from  a  society  in 
which  the  contract  of  membership  is  specifically  written  out. 
Custom  may  not  be  shown  to  take  the  place  of  the  contract  of 
membership  as  agreed  upon,  but  may  be  shown  merely  as 
evidence  of  the  adoption  of  an  additional  unwritten  provision. 

Where  this  contract,  originally  silent  as  to  the  power  of  ex- 
pulsion, has  been  amended  from  time  to  time  during  the  ])er- 
iod  over  which  it  is  proposed  to  show  that  the  custom  of 
expelling  members  has  extended,  but  where  no  amendment  is 
added  upon  the  subject  of  the  power  of  expulsion,  no  custom  can 
])revail  over  the  express  provisions  of  the  contract  as  amended. 

And,  again,  it  may  be  (piestioned  whether  an  established 
usage  can  be  successfully  asserted  in  any  society  which  is  oidy 
in  its  infancy — which  has  only  existed  for  five  or  ten  years. 
A  usage,  in  its  most  extensive  meaning,  includes  both  custom 
and  prescription;  but,  in  its  narrower  signification,  it  refers  to 
a  general  habit,  a  mode  or  course  of  procedure.  A  usage 
differs  from  a  custom,  in  that  it  is  not  required  that  it  should 


72  MKMBERSIIir.  [ClIAP.  3,  §59. 

be  immemorial  to  establish  it;  but  it  must  be  known,  certain, 
uniform,  reasonable,  and  not  contrary  to  law. 

It  will,  therefore,  be  next  to  impossible  to  show  that,  under 
a  contract  of  association  which  has  been  only  a  few  j-ears  in 
existence,  there  can  have  grown  up  a  usage  in  regard  to  the 
expulsion  of  members,  although  no  express  power  of  expulsion 
is  given  by  the  terms  of  such  contract. 

To  make  a  proper  showing  of  such  usage,  it  is  necessary  to 
show  cases  sufficiently  numerous  to  establish  a  course  of  pro- 
cedure, in  which  the  power  has  been  exercised  and  acquiesced 
in  by  the  society.  To  be  able  to  cite  a  few  instances  in  which 
such  a  power  has  been  exercised  will  not  establish  a  usage. 
This  doctrine  is,  by  analogy,  clear  and  well  settled.  ^ 

§  59.  Expulsion  of  members  agreed  upon  in 
contract  of  association.  An  unincorporated  society 
may,  in  its  articles  of  association,  prescribe  the  condi- 
tions upon  which  the  continuance  of  membership  shall 
depend.  There  is  one,  and  only  one,  qualification  to  this 
rule:  such  society  may  not  make  the  continuance  of  member- 
ship dependent  upon  a  condition  which  is  contrary  to  the  laws 
of  the  land. 

In  such  a  society,  the  privilege  of  membership  is  not  given 
by  statute,  as  in  a  corporation,  but  is  created  and  conferred 
by  the  organization  itself,  and  is  derived  exclusively  from  the 
body  that  bestows  it. 

When  a  person  becomes  a  member  he  bases  his  rights,  as 
such,  not  upon  any  charter  which  guarantees  to  him  a  certain 
protection  under  the  laws  of  the  land,  but  upon  the  will  of  a 
majority  of  his  fellow  members,  under  the  contract  of  associa- 
tion. The  policy  and  acts  of  such  a  society  are  necessarily 
controlled  by  a  majority  of  its  members;  and  the  constitution 
and  by-laws  agreed  upon,  contain  the  contract  of  association, 
and  form  the  laws  which  govern  the  majority,  and  each  mem- 
ber of  the  society. 

It  is  not  the  province  of  a  court  to  make  contracts  for 
parties,  and  it  ma}"  not  make  any  other  contract  for  the  mem- 
bers than  that  which  is  set  forth  in  the  constitution  and  by- 
laws. 

The  court  has  no  visitorial  power  over  unincorporated 
societies,  since  they  exist,  not  by  grant  from  the  state,  but  by 
agreement  of  the  members;  and  when  the  parties  have  agreed 
upon  the  terms  under  which  membership  shall  continue,  the 

'  Kniffhts  of  Pvthias'  case,  3  Brew- 
pter  453. 


Chap.  3,  §60.]  membership.  73 

court  will  not  inquire  into  the  reasonableness  or  unreasonable- 
ness of  such  terras. 

There  are  obiter  dicta  in  some  cases,  and  one  decision,  to 
the  elt'ect  that  courts  will  not  inquire  into  the  reasonableness 
of  by-laws  of  voluntary  societies,  even  though  they  be  incor- 
porated, if  it  be  shown  that  the  member  assented  to  them. 

There  are  numerous  obiter  dicta  in  the  books  to  the  effect 
that  courts  will  not  interfere  with  the  rules  and  by-laws  of  un- 
incorporated voluntary  societies,  unless  they  are  manifestly 
harsh  and  tinconscionalle^'  but  it  is  believed  that  there  is  not 
a  case  in  which  a  court  has  ever  declared  a  by-law  of  such  a 
society  to  be  unreasonable  and,  on  that  account,  invalid. 

The  true  rule  is,  that  the  by-laws  of  an  incorporated  society 
must  be  reasonable  and  necessary  for  their  good  government, 
as  well  as  in  conformity  with  the  laws  of  the  land,  and  the 
assent  of  the  members  to  the  by-laws  is  not  to  be  considered; — 
but  individuals  who  form  themselves  into  an  unincorporated 
voluntary  society  for  a  common  object,  may  and  do  agree,  that, 
so  long  as  they  retain  their  relations  with  the  society,  they 
shall  be  governed  by  the  constitution  and  by-laws  as  they  exist, 
and  as  they  may  be  amended  under  the  contract  of  association, 
if  there  is  nothing  in  them  in  conflict  with  the  law  of  the  land; 
and  those  who  become  members  of  the  society  are  presumed  to 
know  them,  to  have  assented  to  them,  and  are  bound  by  them. 

While  a  society  remains  unincorporated,  therefore,  it  may 
make  regulations  ad  libitum  for  the  discipline  of  its  members, 
including,  of  course,  expulsion,  sO  long  as  they  are  not  in  con- 
flict with  the  law.  But  the  moment  it  obtains  a  charter,  it 
parts  with  the  powers  it  before  possessed,  and  comes  under 
the  law  which  governs  corporate  bodies.' 

While  this  power  to  determine  the  causes  for  which  a  mem- 
ber may  be  expelled  is  very  extensive,  and  may  be  said  to  be 
almost  beyond  the  control  of  the  law,  yet  it  is  held  in  check 
and  from  abuse  by  the  powerful  motive  of  self-interest. 

The  abuse  of  the  power  may  be  visited  upon  those  who  are 
responsible  for  such  abuse;  and  hence  the  compact  of  associa- 
tion will  naturally  l^e  formed  in  a  spirit  of  justice  and  fair- 
ness to  the  interests  of  all  the  mcml^ers. 

§  60.  SaiDO  subject  continued.  Where  the  rules  of 
an  unincorporated  society  provide  that  if  the  society  "  shall  at 
any  time  deem  the  conduct  of  any  member  suspicious,  or  that 

'  State  V.  Medical  Society,  38  Ga. 
608. 


74  MEMBERSHIP.  [ChAP.  3,  §61. 

such  ineniber  is  foj*  any  other  reason  unworthy  of  remaining 
in  this  society,  they  shall  have  full  ])Ower  to  exclude  such 
member,"  etc., — the  language  of  these  rules  gives  an  uncon- 
ditional and  absolute  power  to  the  society  to  expel  a  member.' 

The  rules  of  a  club  provided  that  "  it  shall  be  the  duty  of 
the  committee,  in  case  any  circumstances  should  occur  likely 
to  endanger  the  welfare  and  good  order  of  the  clul),  to  call  a 
meetino;,  and  in  event  of  its  beino;  voted  at  that  meeting  Ijv 
two-thirds  of  the  persons  present,  to  be  decided  by  ballot,  that 
the  name  of  any  member  shall  be  removed  from  the  club,  then 
he  shall  cease  to  belong  to  the  club." 

The  court,  in  commenting  upon  the  power  of  this  club  to  ex- 
pel its  members,  says:  "  It  is  clear  that  every  member  has  con- 
tracted to  abide  by  that  rule  which  gives  an  absolute  discre- 
tion to  two-thirds  of  the  members  present  to  expel  any  mem- 
ber. Such  discretion,  like  that  referred  to  by  Lord  Eldon,  in 
While  V.  Damon,  7  Yes.  35,  must  not  be  a  capricious  or  arbi- 
trary discretion.  But  if  the  decision  has  been  arrived  at 
bonajide,  without  any  caprice  or  improper  motive,  then  it  is 
a  judicial  opinion  from  which  there  is  no  appeal.  None  but 
the  members  of  the  club  can  know  the  little  details  which  are 
essential  to  the  social  well-being  of  such  a  society  of  gentle- 
men, and  it  must  be  a  very  strong  case  that  would  induce  this 
court  to  interfere."^ 

Where  the  only  penalty  imposed  by  the  constitution  and 
by-laws  of  an  unincorporated  society  for  an  offense,  is  a  fine,  the 
expulsion  of  a  member  for  such  an  offense  is  invalid.^ 

§  61.  Reiiistateinent  to  lueiiibersliip  in  uiiincor- 
poratecl  society.  Unincorporated  voluntary  societies  will 
be  held  to  the  fair  and  honest  administration  of  the  rules 
which  are  in  force  when  any  proceeding  is  instituted  against 
a  membej-;  but  where  the  rule  which  the  member  is  found  to 
have  violated,  is  not  contrar}^  to  the  law  of  the  land,  and  a 
member  is  expelled  in  conformity  with  the  rules,  after  proper 
notice,  and  the  proceedings  are  regular,  and  in  good  faith,  no 
judicial  trilnmal  may  interfere  with  the  expulsion. 

In  Dawkins  v.  Antrobus,  44  Law  Times  Report,  (N.  S.)  557, 
it  is  laid  down  as  a  rule,  that  courts  will  consider  the  expul- 

'  Wood   V.   Woad  et  al.   L.   R.   9  bert  v.  Addison,  46  L.  T.  R.  20 ;  Lvt- 

Exch.  190.  telton  v.  Blackburn,  33  L.  T.  R.   N. 

-  See  Inderwick  v.  Snell,  2  Mac.  &  S.  642. 
G.  216;  Manby  v.  Gresham  Life  As-        ^  Otto  v.  Journeyman's  etc.  Union 

surance  Society,  29  Beav.  439;  Lam-  Cal:  17  Pac.  Rep.  217. 


Chap.  3,  §62.]  membeksiiip.  75^ 

sion  of  a  member  from  an  unincorporated  society,  only  to  deter- 
mine three  things;  iirst,  whether  the  decision  arrived  at  is 
contrary  to  natural  justice,  as,  for  instance,  whether  he  had 
an  opportunity  to  l;)e  heard  in  explanation  of  his  conduct; 
secondly,  whether  the  rules  of  the  society  have  been  observed; 
thirdly,  w^hether  the  action  of  the  society  was  malicious  and 
not  honajide.  Courts  will  not  undertake  to  act  as  courts  of 
appeal  from  the  decisions  of  tribunals  of  unincorporated 
societies,  but  will  only  determine  whether  such  tribunals  have 
acted  ultra  vires.  The  court  has  no  right  to  consider  whether 
what  was  done  was  right  or  not,  or  even,  as  a  substantive 
question,  whether  what  was  done  was  reasonable  or  unreason- 
able. It  may  inquire  into  the  reasonableness  of  the  action  of 
the  society,  and  from  the  want  of  reasonableness, — from  the  fact 
that  the  action  is  beyond  reason,  it  may  Und  evidence  tending 
to  show  bad  faith  in  such  action.  But  mere  proof  that  the- 
action  is  contrary  to  reason  is  no  cause  or  sufficient  ground 
why  the  court  should  interfere.  Such  proof  is  not  a  necessary 
conclusion  that  there  has  been  want  of  good  faith,  for,  even, 
after  having  come  to  the  conclusion  that  a  decision  was  wholly 
unreasonable,  one  might  be  convinced  aliunde  that,  neverthe- 
less, there  was  no  malice, — that  what  was  done  was  done  in 
good  faith.  It  is  not  for  the  court  to  decide  whether  or  not 
it  would  have  arrived  at  the  same  coiwilusion  with  the  society. 
It  will  examine  into  the  proceedings  and  decision  of  the  mem- 
bers, and  consider  whether  or  not  they  are  erroneous,  only  for 
the  purpose  of  determining  whether  they  are  so  absurd,  or  ev- 
idently wrong,  as  to  aft'ord  evidence  that  their  action  was  not 
hona  -fide,  but  was  malicious,  or  capricious,  or  proceeded  from 
some  other  motive  than  a  desire  to  exercise  fairly  and  honestly 
the  ])ower  given  by  the  rules  of  the  society.  The  agreement 
of  the  associate  is,  not  tiiat  he  will  submit  to  expulsion  if  the 
courts  shall  say  he  ought  to  be  expelled,  but  that  the  members 
of  the  society,  acting  in  good  faith,  and  according  to  the  rules, 
may  expel  him,  even  though  they  make  an  honest  mistake  in 
exercising  that  power. 

§63.  Same  suT).ject  continued  The  rights  of  a 
person  who  has  been  expelled  from  an  unincorporated  society 
are  to  l)e  determined  by  the  constitution,  by-laws  and  rules  of 
the  society. 

The  provisions  of  such  constitution,  by-laws  and  rules,  must 
be  strictly  followed  in  all  proceedings  for  the  expulsion  of  a 
member;  and  a  result  reached  through  their  violation  cannot 


'76  MEMBERSHIP.  [Chap.  3,  §62. 

l>e  upheld.  JSTo  member  of  a  society,  whether  incorporated  or 
unincorporated,  should  lose  his  right  of  menihership  uj^on  a 
doubtful  construction  of  the  bj-laws,  rules  and  regulations  of 
the  society.  Such  by-laws,  rules  and  regulations  must  be 
construed  liberally,  with  a  vieW  to  the  maintenance  and  con- 
tinuance of  the  rights  of  membership;  and,  in  case  of  conflict. 
ing  provisions  setting  forth  the  member's  rights  and  duties,  or 
the  proceedings  that  may  be  taken  to  deprive  him  of  his 
rights,  that  provision  will  prevail  which  is  most  favorable  to 
the  continuance  of  his  membership. 

Membership  in  an  incorporated  society  is  a  species  of  prop- 
erty-, and,  as  has  been  said  on  a  preceding  page  of  this  work, 
the  court  will  interfere  to  protect  that  right  of  membership, 
even  though  the  society  has  no  property.  But  the  law  does 
not  regard  membership  in  an  unincorporated  society  as  a 
valuable  right  and  privilege,  and  a  court  will  not  inquire  into 
the  proceedings  in  expulsion  from  such  a  society  merely  to 
restore  a  member  to  the  privilege  of  meeting  the  other  mem- 
bers of  the  society.' 

As  a  general  rule,  therefore,  in  order  to  give  the  court 
jurisdiction  to  inquire  into  such  proceedings  in  expulsion, 
some  allegation  and  proof  must  be  made  showing  an  injury  to 
the  right  of  enjoyment  of  the  property  of  the  society.  He 
cannot,  probably,  show  any  severable  proprietary  interest  in 
the  property  of  the  society,  but  he  may  show,  as  has  been 
suggested,  a  right  to  the  use  and  enjoyment  of  it,  and  a  right 
to  a  proportionate  share  of  it  in  case  of  a  dissolution  of  the 
association. 

Where  the  expulsion  has  been  effected  contrary  to  the 
general  principles  of  the  law,  as,  for  instance,  without  notice 
or  opportunity  to  be  heard,  or  for  not  complying  with  an 
illegal  by-law  of  the  society,  the  court  will  not  require  a  strong 
showing  of  pecuniary  loss,  but  will  take  jurisdiction  even 
where  remote,  indirect  or  small  pecuniary  loss  has  resulted,  or 
may  result  to  the  member." 

The  rules  of  a  club  provided  that,  in  case  the  conduct  of  any 
member,  either  in  or  out  of  the  club-house,  should,  in  the 
opinion  of  the  committee,  or  of  any  twenty  members  of  the 
club  who  should  certify  the  same  in  writing,  be  injurious  to 
the  character  and  interests  of  the  club,  the  committee  should 

'  White  V.   Brownell,  4  Abb.    Pr.  L.  R.,  11  Chan.  Div  ,  353;  Metropol- 

(N.  S  ),  (N.  Y.),  162.  itan  Base  Ball  Club  v.  Simmous,  17, 

-  Innesv.  Wylie  et  al.,  1  Car.  and  Weekly  Notes  of  Cases,  153. 
Kir.   Rep.  257;     Fisher  v.    Keane, 


Chap.  3,  §63.]  membership,  7T 

be  empowered  (if  they  deemed  it  expedient)  to  recommend 
such  member  to  resign,  and,  if  the  member  so  recommended 
should  not  comply  within  a  month  from  the  date  of  such  com- 
munication being  addressed  to  him,  the  committee  should  then 
call  a  general  meeting,  and,  if  a  majority  of  two- thirds  of  that 
meeting  agreed  by  ballot  to  the  expulsion  of  such  member,  his 
name  should  be  erased  from  the  list,  and  he  should  forfeit  all 
right  or  claim  upon  the  property  of  the  club.  A  member  of 
the  club  sent  a  pamphlet  which  reflected  on  the  conduct  of 
another  member,  S.,  at  his  official  address,  such  pamphlet 
being  enclosed  in  a  cover  on  which  was  printed:  "  Dishonor- 
able conduct  of  S."  This  was  brought  to  the  attention  of  the- 
committee,  and  they  called  upon  the  member  to  resign,  being 
of  opinion  that  his  conduct  was  injurious  to  the  character  and 
interest  of  the  club.  He,  however,  refused  to  resign,  and  a 
general  meeting  was  called,  at  which  the  requisite  majority 
voted  in  favor  of  his  expulsion.  On  an  action  by  the  member- 
to  restrain  the  committee  from  excluding  him  from  the  club 
it  was  held  that  the  plaintiff  having  had  an  opportunitv  of 
explanation,  the  rules  having  been  observed,  and  the  action  of 
tlie  club  having  been  exercised  hona  fide^  and  without  malice,, 
the  member  was  entitled  to  no  relief  from  the  court.' 

§  63.     Proper  remedy  of  exx>ellecl  member.     A 

proceeding  may  be  maintained  against  the  members  of  an  un- 
incorporated society,  or  against  a  number  of  them  representing- 
the  others,  when  they  are  too  numerous  to  be  joined,  by  an 
expelled  member  thereof,  to  compel  his  restoration  of  mem- 
bership. The  object  of  such  a  proceeding  is  to  place  him  in  a 
position  where  he  can  reach  the  joint  property  and  rights  of 
the  association.  The  propriety  of  the  expulsion  may  be  re- 
viewed in  such  a  suit.'^ 

Mandamus  is  not  a  proper  remedy  against  an  unincorporated 
society  for  the  restoration  of  an  expelled  member.^ 

It  is  held  in  several  cases  that  the  proper  remedy  of  a  mem- 
ber who  is  about  to  be  illegally  ex])elled  from  an  unincorpor- 
ated society,  is  by  bill  in  equity  seeking  to  restrain  the  tri- 
bunal from  further  proceedings  in  the  matter;  and  that  the 
proper  remedy  of  a  member  who  has  been  illegally  expelled 
from  such  a  society,  is  by  a  bill  in  equity  to  restrain  the  offi- 

'  Dawkins  v.  Antrobus.  44  L.  T.  R.  Olery  v.  Bro-wn,  51  How.  Pr.  92. 

(N.  S.)  557 ;   L.   R.   17    Chan.    Div.  '  People  v.  German,,  etc.   Churchv 

G15.  53N.  Y.  103^ 

•Fritz  V.  Muck,  63  How.  Pr.  70; 


78  MEMBERSHIP.  [Chap.  3,  §64. 

■cers  and  members  from  interfering  with  his  rights  of  member- 
ship.' 

In  Loubat  v.  Leiloy,  40  Hnn  546,  the  action  was  to  have 
•decreed  as  unlawful,  null  and  void,  a  resolution  of  expulsion 
passed  by  the  society,  and  to  restrain  the  officers  and  members 
of  the  society  from  interfering  with  the  enjoyment  by  plaintiff 
of  his  rights  and  privileges  as  a  member;  and  such  relief  was 
granted."^ 

§  64.  Charges  against  a  meiiiber  of  an  unin- 
corporated society.  Whether  the  moral  conduct,  or  acts 
complained  of  as  prejudicial  to  the  society,  are  sufficient  to 
justify  expulsion,  under  the  general  power  of  expulsion  agreed 
\Tpon  in  the  constitution  of  the  society,  is  a  matter  exclusively 
for  the  tribunal  hearing  the  complaint,  and  not  for  the  court 
to  decide. 

Such  decisions  may  not  be  reviewed  by  a  court,  nor  even  be 
considered,  unless  the  alleged  cause  of  expulsion  be  so  trivial, 
•or  unimportant  of  itself,  as  to  suggest  that  the  action  of  the 
tribunal  was  capricious,  or  corrupt,  and  not  hona  fide. 

Whether  a  certain  act  or  omission  is  an  offense  against  the 
laws  of  the  society,  is  a  question  which  the  society  alone  must 
determine.  The  society  must  enact  and  construe  its  own  laws, 
and  enforce  its  own  discipline,  without  the  interference  of 
courts.^ 

The  sufficiency  of  the  charges,  when  made,  in  respect  to  the 
speciiication  of  time,  place  and  circumstance,  will  not  be  in- 
quired into  by  the  courts,  but  must  be  determined  by  the 
society,  or  the  court  of  the  society,  before  which  the  cause  is 
■to  be  tried.  But  if  courts  had  the  power  to  determine  the 
sufficiency  of  the  charges  in  such  respects,  they  would  not  test 
the  correctness  of  the  charges  by  the  strict  rules  of  criminal 
pleading,  but  would  hold  that,  if  they  are  so  plainly  drawn  that 
the  nature  of  the  offense  maybe  understood,  they  will  be  suffi- 
cient. 

A  society  is  bound  by  the  exact  letter  of  its  rules,  and  must 

'Kerr  v.  Trego,  11  Wright  293;  Brewster  .571 ;  In  re  St.  Clement's 

Fisher  v.  Keane   L.  E.  11    Ch    Div.  Church,  28  Leg.  Int.  172.     But  see 

353;  Metropolitan  Base  Ball  Club  v.  Sec.  85-86. 

Simmons,  17  Weekly  Notes  of  Cases  *  See  Rorke  v.  Russell,    2  Lans. 

153;  Labouchere  v.Earl  of  Wham-  (N.Y.  Sup.  Ct.)  244. 

cliff,  L.  R.  13  Ch.  Div.  347;  Kerr  on  ^Dawkins  v.    Antrobus,  44  Law 

Injunctions,     Star    pages    545-6-7;  Times   Report  (N.  S.)  557;  Chase  v. 

Hassler  v.  Phil.  Musical  Ass.Tciation.  Cheney.  58  111.   509;  Wood  v.  Woad 

-37  Leg.  Int.  434;    Leech  v.  Harris,  2  et  al  L.  R.  9  Exch.  190. 


Chap.  3,  §64.]  membership,  79 

follow  them  strictly,  when  seeking  to  expel  a  member  for  a 
supposed  violation  of  them. 

A  member  was  expelled  from  a  society.  The  club  from 
which  he  was  expelled  was  a  workingmen's  club,  and  the  mem- 
ber was  also  a  member  of  a  licensed  victuallers'  trade  pro- 
tective association.  The  circumstances  under  which  the 
plaintiff  was  expelled  by  the  club  committee  were  as  follows: 
The  committee  of  the  club,  wdio  had  no  license  for  the  sale  of 
spirituous  liquors,  were  accustomed  to  sell  spirits  and  beer  in 
bottles  to  members,  to  be  either  consumed  on  the  premises  or 
taken  away.  The  plaintiff,  to  test  the  legality  of  this  course, 
and  by  the  instructions  of  his  trade  protective  association, 
bought  a  bottle  of  whiskey  and  another  of  beer  at  the  club 
And  took  them  away  with  him.  He  then  sent  a  messenger 
with  his  member's  ticket,  to  buy  a  bottle  of  beer,  but  he  was 
not  served,  on  its  being  discovered  that  the  messenger  was  not 
a  member.  The  trade  pi'otection  association  took  out  a  sum- 
mons in  the  police  court  against  the  committee  for  an  infringe- 
ment upon  the  licensing  laws;  evidence  was  given  by  the  plain- 
tiff in  support  of  the  charge,  and  the  committee  was  held  guilty 
and  fined. 

The  plaintiff  was  then  informed  that  his  conduct  would  be 
considered  by  the  committee,  and  they  afterward  informed 
liim  that  he  had  been  expelled  for  breach  of  the  clul)  rules. 
The  only  rule  which  was  cited  on  the  hearing  of  the  motion,  as 
having  been  infringed,  was  a  rule  providing  that  no  visitor 
could  pay  for  any  article,  and  the  contention  of  the  club  was, 
that  the  attempt  of  tJie  plaintiff  to  purchase  through  the  mes- 
senger was  a  breach  of  the  rule  with  respect  to  visitors.  The 
motion  on  behalf  of  the  plaintiff  was  for  an  injunction  to  re- 
strain the  committee  from  interfering  with  his  enjoyment  of 
the  club  property,  and  the  application  was  granted  on  the 
ground  that  no  breach  of  the  rules  had  been  committed.' 

Where,  under  the  powers  of  the  constitution,  a  member  has 
been  expelled  by  the  ininisters  and  elders  of  a  church,  for 
entertaining  opinions,  and  ])romuigating  doctrines  within  the 
society,  at  variance  with  the  established  belief  and  sul)versive 
of  the  society,  the  court  will  not,  in  an  actic»n  of  tort  for  such 
expulsion, determine  whether,  or  not,  the  opinions  and  doctrines 
of  the  expelled  member  were,  in  fact,  inconsistent  with  the 
established  belief  of  the  society  .^ 

'  72  Law  Times,  183  102;  Farnsworth  v.  Storrs,  5.  Cush. 

^  Grosvenor  V.  United  Society,  118    412. 
Mass.  78;  Waite  v.    Merrill,  4  Me. 


80  MEMBERSHIP.  [ChAP.  3.  §64. 

Where  it  was  alleged  that  the  offense  was  committed  "  at 
divers  times  during  the  two  years  last  past  "  and  "  at  divers 
times  during  the  six  months  hist  past,"  the  charges  were  lield 
suthcient  in  regard  to  the  time  laid,  as  the  allegation  of  tlie 
precise  time  was  not  essential.'  ' 

'  Chase  V.  Cheney,  58  111.509. 


Chap.  3,  §65.]  membership.  81 


Membership.— Part  IV. 

Sec  65.     Notice  of  'charges  against  member ;  opportunity  to  be  heard. 
Sec  66.     Exceptions  to  the  rule  that  notice  must  be  given. 
Sec.  67.     Service  and  proof  of  notice. 
Sec.  68.     Waiver  of  notice 

Sec.  69.    Answering  charges  at  same  meeting  at  which  they  are  pre- 
sented. 

Sec  71*  f  Sufficiency  of  notice,  waiver  of  sufficiency,  etc. 
Sec.  72.    Tribunal  of  the  society  expelling  a  member. 
Sec  73.    Right  to  trial  by  jury  does  not  apply  to  proceedings  in  expul- 
sion. 
Sec  74  ) 
Sec  76    '  ^^^S^^l^^ty  of  proceedings  in  expulsion. 

Sec  77.     Statute  of  limitations  does  not  apply  to  proceedings  in  expul- 
sion. 
Sec  78.    Good  faith  in  proceedings  in  expulsion. 

§  65.  Notice  of  charges  —  opportunity  to  be 
heard.  It  may  be  stated,  as  the  general  rule,  that  a  society, 
the  members  of  which  become  entitled  to  privileges  or  rights  of 
property  therein,  may  not  exercise  its  power  of  expulsion  with- 
out notice  to  the  member,  or  without  giving  him  an  oppor- 
tunity to  be  heard.  It  is  a  fundamental  principle  of  law, 
recognized  in  every  court  of  justice,  that  no  man  shall  be  con- 
demned or  prejudiced  in  his  rights,  without  an  opportunity  to 
be  heard.  A  society,  or  select  number  of  its  members,  to 
whom  authority  is  given  in  the  premises,  is  a  court  when  pass- 
ing on  the  rights  of  its  members.  Audi  alteram  partem^  is 
the  first  principle  in  the  administration  of  justice,  and  it  is 
against  natural  justice  to  proceed  against  one's  rights  without 
giving  him  an  opportunity  to  be  heard  in  defense  of  them.' 

It  is  competent  for  the  members  of  a  society  organized  for 
the  purpose  of  mutual  insurance,  to  agree  that  the  non-pay- 
ment of  an  assessment  levied  by  it,  within  a  stipulated  period 
of  time  after  notice  of  the  assessment,  shall  Ipso  facto  ^  oper- 
ate as  an  expulsion  of  a  delinquent  member  from  the  society. 

Such  an  expulsion  is  in  reality  a  forfeiture  of  rights  for  a 
cause  over  which  the  member  has  full  control,  and  for  a  cause 
which  imputes  to  the  member  no  disgraceful  conduct.' 

'  People  V.  Benevolent   Society,  3  69 ;  Loubat  v.  LeRoy,  40  Hun  (N. 

Hun  361;    Delacy  v.   Neuse  River  Y.)  542. 

Nav.  Co.  1   Hawks  (11   N.  C.)  274;  *See  assessments — forfeiture  for 

Fritz  v.  Muck,  62  How.  Pr.  (N.  Y.)  non-payment. 


82  MEMBERSHIP.  [ClIAP.  3,  §60. 

But  it  is  a  well  established  rule  of  law  that  no  man  shall  be 
condemned  to  suffer  the  consequences  resulting  from  alleged 
misconduct,  until  he  has  been  noticed  of  the  accusation,  and 
been  given  an  opportunity  of  jnaking  his  defense.  This  rule 
is  not  conlined  to  the  conduct  of  strictly  legal  tribunals,  but  is 
applicable  to  every  tribunal,  or  body  of  persons  invested  with 
authority  to  adjudicate  upon  matters  involving  civil  conse- 
quences to  individuals. 

A  by-law  providing  that  a  member  may  be  expelled  for  any 
alleged  misconduct,  without  notice  to  liim,  and  without  afford- 
ingliim  an  opportunity  to  be  heard,  is  in  conflict  with  the  law 
of  the  land,  and  is  void.' 

§  66.  Exceptions  to  the  rule  that  notice  must 
be  given.  But  where  a  member  was  twice  cited  to  appear 
and  stand  his  trial  before  a  tribunal  of  the  society,  and  ap- 
peared each  time,  and,  by  ruffianism  and  violence,  broke  up 
the  meeting  and  prevented  a  sentence,  the  court  refused  to 
exercise  its  equitable  powers  to  restore  him  to  membership, 
where  it  appeared  that  at  a  third  meeting  he  was  expelled 
without  notice  to  him.* 

Where  a  member  of  the  society  has  been  tried  in  a  court  of 
the  land,  found  and  adjudged  guilty  of  an  infamous  crime, 
and  the  judgment  of  the  court  has  been  sustained  in  the  high- 
est court  of  appeals  in  the  state,  it  is  apprehended  that  an 
ex])ulsion  from  the  society,  without  notice,  or  preferment  of 
specific  charges,  would  be  valid  and  binding.  In  such  a  case 
it  is  to  be  presumed  that  the  member  had  a  fair  and  impartial 
trial  in  court,  and  the  judgment  of  the  court  being  conclusive 
against  the  member  as  to  his  guilt,  may  well  be  accepted  by 
the  society  as  a  sufficient  determination  of  his  unfitness  for  con- 
tinued membership.  A  resolution  at  a  proper  meeting,  declar- 
ing his  rights  of  membership  forfeited  because  of  his  convic- 
tion in  court  of  the  crime,  would  doubtless  be  a  valid 
expulsion. 

Under  a  provision  of  the  constitution  of  the  grand  or 
supreme  body  of  a  mutual  benefit  society,  guaranteeing  a  fair 
hearing  to  every  member  before  expulsion,  except  when  such 
member  has  been  expelled  from  a  subordinate  lodge  of  the 
society,  of  which  he  was  a  member,  it  is  competent  for  the 

'Wood  v.Woadfi  ffi  L.  R.  9  Exch.    28;    Compare  dictum   in  People  v. 
190;  Fritz  v.  Muck,  62  How.  Pr.  (N.     Society,  24  How.  Pr.  on  p.  221. 
Y  )  69 ;  Wachtel  v.  Society,   84  N.Y.        -  State  v.  Portugese  Society,  15  La. 

Ann.  73. 


Chap.  3,  §67.]  membership.  S3 


grand  or  supreme  body  to  expel,  without   notice,  a  member 
who  has  been  expelled  bj  the  subordinate  lodge.' 

§  67.  Service  and  proof  of  notice.  Although  the 
rules  of  the  society  do  not  provide  that  notice  shall  be  given 
to  a  member,  of  the  charges  against  him,  and  the  meeting  at 
which  he  will  be  tried,  the  member  to  be  expelled  should 
have  such  notice,  and  be  given  an  opportunity  to  be  heard  in 
his  defense.^ 

A  by-law  of  a  religious  society  provided  as  follows:  "Any 
member  who  shall  either  cease  to  regularly  worship  with  the 
society,  or  who  shall  fail  to  contribute  to  the  support  of  its 
public  worship,  for  the  term  of  one  year,  shall  have  his  or  her 
name  dropped  from  the  list  of  members." 

It  was  held  that  a  member  could  be  deprived  of  his  mem- 
bership only  by  a  vote  of  the  society,  after  notice,  and  oppor- 
tunity to  be  heard.' 

In  the  absence  of  any  agreement  by  the  member,  or  any 
provision  in  the  charter  or  by-laws,  for  a  different  mode  of 
service,  it  should  be  made  personally,  as  required  at  common 
law,  where  the  object  is  to  deprive  a  party  of  his  rights,  or 
property;  or,  if  that  can  be  dispensed  with,  then  in  such  other 
mode  as  will  be  most  likely  to  effect  its  object.^ 

Where  a  party  is  entitled  to  notice,  and  has  not  stipulated 
to  have  it  transmitted  by  mail  or  otherwise,  he  is  not  bound 
by  any  notice  until  it  has  actually  been  received.^ 

Unless  some  special  mode  or  form  of  notice  be  required 
by  the  charter,  or  by-laws,  personal  service  will  be  suffi- 
cient.* 

Kotice  of  charges  against  a  member  is  not  sufficiently 
proved  by  the  testimony  of  a  witness,  that  he  served  on  the 
accused  member  a  written  notice  to  appear  at  a  particular 
time,  where  he  also  testifies  that  he  cannot  say  what  the  notice 
was,  as  he  handed  it  to  the  accused  without  reading  it  to  him, 
and  it  was  written  by  an  officer  of  the  society,  who  is  not  ex- 
amined.' 

'  Pfeiffer  v.  Mt.  Horeb  Eucamp-  Castner  v.  Farmer's  Mutual  etc.,  50 
ment,  etc.,  13  Daly  161.  Mich.  273. 

^  Fritz  V.  Muck,  02  How  Pr.  69.  ''.Jones  v.  Sisson,  6  Gray  288 ;  York 

■^Gray    v.    Christian  Society,   Vol     Co.  Mut.  etc.  v.  Kniglit,  48  Me.  75; 
Mass.    329 ;   See  Commonwealth   v.  ,  "Williams  v.  German  Mutual  etc.  68 
Pennsylvania  Beneficial   Institution     111.  387. 
2  Sar.  &  R.  (Pa.)  141.  ^  Downing    v.  St.   Columba's  So- 

*  Wachtel  v.  Noah  Widows'  and  ciety,  10  Daly  262 ;  Proof  of  service 
Orphans'  Society,  84  N.  Y.  28.  or  giving  of  notice,  involves  proof  of 

^  Durhans  V.  Corey,  17  Mich.   282;    its"  contents;    Supreme     Lodge    v. 

Johnson,  78  Ind.  110 


84  MEMBERSHIP.  [ClIAP.  3,  §68. 

The  by-laws  of  a  mutual  benefit  society  provided  that  eack 
applicant  for  membership  should  be  a  member  in  good  stand- 
ing of  a  lodge  of  Odd  Fellows,  and  that,  if  he  were  dropped 
or  expelled  from  his  lodge,  his  membership  should  cease,  and 
the  society  should  not  be  bound  to  his  beneficiary.  The  by- 
laws of  the  Odd  Fellows  lodge  to  which  a  member  of  such 
mutual  benefit  society  belonged,  provided  that  notice  should 
be  issued  by  the  secretary  to  members  in  arrears  for  dues,  and 
that  if  the  dues  were  not  paid  within  four  weeks  from  the  date 
of  notice,  the  delinquent  should  be  dropped.  It  was  held  that 
it  was  not  sufiicient  to  cause  the  forfeiture  of  his  rights  in  the 
mutual  benefit  society  that  the  books  of  his  lodge  contained  an 
entry  that  he  had  been  dropped,  in  the  absence  of  the  evidence 
that  he  had  received  the  required  notice." 

Where  a  firm  is  a  member  of  a  chamber  of  commerce,  and 
each  member  of  the  firm  has  the  rights  of  members  of  the 
chamber,  notice  of  the  charges  of  unmercantile  conduct 
against  any  member  of  the  firm,  may  be  properly  given  to  the 
firm  itself.' 

A  return  to  a  mandaimis  to  restore  an  exyjelled  member, 
which  states  that  the  expelled  member  was  heard  in  his  de- 
fense, is  sufiicient,  without  stating  that  he  was  summoned  to 
appear.^ 

§  68.  Waiver  of  notice,  l-'iv  Commonwealth  v.  Penn- 
sylvania Beneficial  Institution,  2  Sar.  &  R.  (Pa.)  l-il,  it  is  said, 
that  if  the  accused  member  is  present  when  the  subject  of  his 
expulsion  is  taken  up,  and  is  willing  to  enter  into  the  inquiry 
immediately,  there  is  no  occasion  for  further  notice. 

Willcox  on  Municipal  Corporations  at  page  265  lays  it  down, 
as  the  rule,  that  when  the  accused  has  appeared  at  the  meeting,, 
and  either  defends  himself,  or  answers  or  confesses  the  charge 
against  him,  he  thereby  waives  his  right  to  notice. 

In  Downing  v.  St.  Columba's  etc.  Society,  10  Daly  (JST.  Y.) 
262,  it  is  said:  "  It  has  been  decided  that  though  a  member 
attends,  and  enters  upon  his  defense,  he  does  not  waive  his 
rio;ht  to  a  notice  of  the  charo^es."  The  reason  suo^o'ested  for 
such  a  rule  is,  that  if  a  member  be  not  apprised  of  the  charges, 
he  will  have  no  opportunity  to  bring  witnesses  in  his  behalf. 
It  is  undoubtedly  true,  that,  if  a  member  appears  at  a  meeting 

'  Odd  Fellows  etc.  Association  v.  ^King  v.  Mayor  etc.  of  Wilton,  5 

Hook,  10  Cin.  Law  Bulletin  891.  Modern    Repts.    257;    2    Salkeld's 

■^  Blumenthal  v.  Chamber  of  Com-  Repts.  428. 
merce,  7  Cin.  Law  Bull.  337. 


Chap.  3,  §69.]  membership.  85 

where  charges  against  him  are  taken  up  for  hearing,  and  de- 
clares that  he  has  had  no  notice  of  the  charges,  and  that  he  is 
unwilling  to  proceed  with  the  investigation,  he  .does  not  waive 
his  right  to  a  notice  of  the  charges  by  entering  upon  his  de- 
fense. By  his  protest,  he  saves  his  right  to  question  the  juris- 
diction of  the  society  over  his  person.  But  if  he,  without 
qualilication,  submits  himself  to  the  jurisdiction  of  the  society, 
he  undoubtedly  waives  his  right  to  notice. 

The  authorities  cited  by  the  court  in  Downing  v.  St, 
Columba's  Society,  supra,  do  not  sustain  the  proposition 
therein  laid  down.  They  are  to  this  effect:  Where  the  con- 
tract of  membership  provides  that,  when  charges  are  preferred 
against  a  member,  notice  of  the  meeting  at  which  they  shall 
be  considered,  shall  be  given  in  a  certain  manner  to  the  mem- 
bers of  the  society,  the  fact  that  the  accused  member  attends  a 
meeting  of  which  proper  notice  has  not  been  given,  and  enters 
upon  his  defense  before  the  society,  does  not  preclude  him 
from  afterward  tiling  a  bill  impeaching  the  proceedings  at  that 
meeting  as  irregular  and  invalid  for  want  of  proper  notice.' 
As  the  society,  in  proceedings  of  expulsion,  acts  as  a  court  of 
limited  and  special  jurisdiction,  it  is  necessary,  in  order  that  it 
may  obtain  jurisdiction  of  the  subject  matter,  that  all  the  steps 
required,  under  the  contract  of  membership,  be  taken.  1^^^  an 
appearance  at  the  investigatic?n,  the  accused  member  neither 
confers  jurisdiction  of  the  subject  matter  upon  the  society 
nor  admits  such  jurisdiction  to  be  in  it.  The  society  must,  by 
its  own  acts,  in  accordance  with  the  contract  of  membership, 
acquire  jurisdiction  of  the  subject  matter.  The  society  may 
acquire  jurisdiction  of  his  person  by  serving  the  required 
notice  upon  him,  or  it  may  acquire  it  by  the  consent  and  act 
of  the  accused  member,  in  submitting  himself  to  its  jurisdiction. 

§  69.  Answering  charges  at  same  meeting  at 
which  they  ai*e  presented.  Sergeant  Whi taker's  case, 
2  Ld.  Raymond  1240;  2  Salkeld's  Repts.  435,  is  sometimes 
quoted  as  authority  for  the  statement  that  it  is  very  doubtful 
whether  a  member  waives  his  right  to  notice  by  appearing  to, 
and  answerino;  charijes  at  the  same  meetinir  at  which  the 
chai-ges  are  presented. 

But  Iv3'd  on  Corporations,  on  page  447,  says  of  that  case; 
"  It  is  not  easy  to  reconcile  the  event  of  the  case  with  what  is 
reported  to  have  been  said  by  the  Chief  Justice  and  the  court, 

'  See  S  70. 


86  MEMBERSHIP.  [ChAP.  3,  §70, 

'  that  the  sergeant  appearing,  and  being  charged  and  answer- 
ing, supplied  the  want  of  notice,  both  of  the  time  and  of  the 
offense,'  and  'that  he  might  waive  the  notice  if  he  would.' 
The  ground  on  wliich  the  peremptory  mandamus  was  awarded 
was  that  one  offense  was  specified  in  the  notice,  and  that  he 
was  charged  with  another  when  he  appeared;  how  is  this 
to  be  reconciled  with  the  proposition  '  that  ajipearing  aiid  an- 
swering supplied  the  want  of  notice  of  the  offense'?  That  a 
man  may  waive  anything  which  the  law  has  intended  for  his 
benefit,  is  a  general  proposition  which  cannot  be  denied;  and 
as  previous  notice  of  an  offense  charged  against  a  party,  is 
given  him  only  that  he  may  come  prepared  to  defend  himself, 
he  may,  no  doubt,  dispense  with  it. 

But  if  he  be  present  accidentally  at  a  meeting,  and  answer 
immediately,  or  be  unable  to  give  an  answer,  to  a  charge 
made  against  him,  of  which  he  had  no  previous  notice,  is  it 
from  thence  to  be  concluded  that  he  waives  the  necessity  of 
such  notice?  I  apprehend  that  nothing  less  would  cure  the 
want  of  notice,  than  an  express  declaration  of  the  party,  that 
he  consented  to  answer  without  it."  ' 

§  70.  Sufficiency  of  notice,  waiver  of  suffi- 
ciency, etc.  In  giving  notice  of  charges  against  a  member 
and  of  a  meeting  called  to  consider  his  expulsion,  the  rules  of 
the  society  must  be  strictly  followed. 

One  of  the  by-laws  of  a  society  provided,  amongst  other 
things,  that  special  meetings  of  the  society  might  be  convened  as 
the  president  should  deem  necessary,  or  upon  the  requisition  of 
any  three  members  of  the  society,  the  notices  of  which  special 
meetings  should  specify  the  business  to  be  brought  forward, 
and  that  no  business  should  be  introduced  at  any  special 
meeting,  in  addition  to  that  specified  in  the  notice.  The 
plaintiff,  as  one  of  the  members  of  the  society,  having  acted 
in  such  a  manner  as,  in  the  opinion  of  the  president,  merited 
his  dismissal,  or  expulsion  from  the  body,  a  meeting  for  that 
purpose  was  ordered  to  be  convened  by  the  president,  and 
notices  were  accordingly  sent  to  all  the  members  of  the  society, 
stating  that  a  meeting  would  be  held  "  for  special  business," 
but  omitting  to  say  what  such  special  business  was.  At  a 
meeting  so  called,  at  which  the  plaintiff  was  present,  a  resolu- 
tion was  unanimously  adopted,  by  the  other  members  present, 

'See  Rex  v.  Faversham,  8  Term 
Rep.  356. 


Chap.  3,  §70.]  membekship.  87 

expelling  plaintiff  from  the  society.  The  notice  calling  such 
meeting  being  invalid,  because  it  did  not  specify  the  business 
intended  to  be  brought  before  the  society,  a  decree  was  pro- 
nounced declaring  that  such  resolution  of  expulsion  had  been 
illegally  and  improperly  passed.  The  fact  that  the  plaintiff 
had  attended  a  meeting  illegally  called,  and  had  entered  upon  a 
defense  before  the  society,  did  not  preclude  him  from  after- 
wards filing  a  bill  impeaching  the  proceedings  as  irregular 
and  invalid.  ^ 

Where  a  by-law  required  two  weeks'  notice  of  a  meeting  to 
be  given,  it  was  held  that  a  notice  posted  at  3  o'clock  A.M.  on 
the  1st  of  the  month  for  a  meeting  to  be  held  on  the  14:th,  was 
insufficient.  "^ 

In  discussing  whether  the  accused  member's  presence,  and 
addressing  the  society,  was  a  waiver  of  the  defect,  the  court, 
in  this  case,  said:  "  In  the  next  place,  the  general  meeting 
was  not  properly  called.  On  the  one  hand,  it  has  been  said, 
that  Mr.  Labouchere  attended  that  meeting,  and  entered  into 
the  discussion;  that  he  did  not  protest  against  the  meeting 
having  been  irregularly  called ;  and  that,  therefore,  he  has  no 
right  now  to  complain ;  but  on  the  other  hand,  Mr.  Labou- 
chere said,  he  did  protest,  though  it  does  not  appear  what  the 
protest  was.  Mr.  Labouchere  was  not  compelled  to  say  what 
it  was.  A  man  might  say,  '  I  have  a  good  defense  upon  the 
merits.  I  contend  that  I  ought  not  to  be  expelled ;  therefore, 
I  am  not  ffoino:  to  run  awav  bv  availino^  mvself  of  a  technical 
objection.'  He  was  entitled  to  say,  'Though  the  meeting  was 
irregularly  called,  I  have  such  a  good  case  on  the  merits,  that 
I  should  like  to  take  your  opinion.'  But  he  was  not  bound  to 
tell  the  meeting  that  it  was  irregularly  or  improperly  called." 

The  by-laws  of  a  society  provided  that  notice  of  a  meeting 
for  the  expulsion  of  a  member  must  be  given.  It  was  held, 
that  a  notice  of  "a  meeting  to  take  into  consideration  the  con- 
duct of  a  member,"  was  not  a  compliance  with  such  provision ; 
that  it  should  state  distinctly  what  the  object  of  the  meeting 
was.  ^ 

By  the  deed  of  settlement  of  a  l'>a])tist  chapel,  it  was  pro- 
vided that  the  minister  should  be  liable  to  be  removed  by  the 
direction  of  the  church,  declared  at  one meeti Tig,  and  confirmed 
at  a  second  meeting:;  that  all  directions  of  the  church  should 

'  Marsh    v.    Huron    College,  27  R.  13  Ch.  Div.  346. 

Gram's  Chan.   Repts.   (Upper  Can-  ^  Cannon    v.    Toronto  Corn    Ex- 

ada)  605  chanije,   27    Grant's  Chan.   Reports 

^  Labouchere    v.  Wharncliffe,  L.  (Upper  Canada)  23. 


88  MEMBERSHIP,  [ChAP.  3,  §70. 

be  declared  by  a  majority  of  communicants  present  at  a  meet- 
ing of  which  notice  should  have  been  given  in  the  chapel  dur- 
ing divine  service  on  Sunday  morning  at  least  four  days  pre- 
viously; also  that  whenever  the  church  should  have  to  consider 
the  appointment  or  dismissal  of  a  minister,  the  notice  should 
expressly  state  the  object  of  such  meeting,  and  each  of  the 
directions  to  be  declared  at  any  such  meeting  should  be 
reconsidered  at  a  second  meeting  to  be  convened  by  public 
notice  to  be  given  in  manner  aforesaid,  expressly  stating  the 
object  thereof. 

On  Sunday,  the  18th  of  October,  a  notice  was  read  in  the 
chapel  to  the  effect  that  a  meeting  would  be  held  on  the 
following  Saturday  "  for  the  purpose  of  bringing  charges 
against  and  considering  the  dismissal  of  "  the  then  minister. 

On  the  24th  of  October  the  meeting  was  held  and  a  resolu- 
tion was  passed  that,  in  consequence  of  certain  offenses  alleged 
to  have  been  committed  by  the  minister,  "  he  is  not  a  fit  and 
proper  person  to  occupy  the  position  of  pastor,  and  that  his 
office  as  pastor  cease  forthwith." 

On  Sunday,  the  25th  of  October,  a  notice  was  read  in  the 
chapel  to  the  effect  that  a  meeting  would  be  held  on  the 
following  Saturday  "  for  the  purpose  of  confirming  and  ratify- 
ing "  the  resolutions  passed  at  the  meeting  of  the  2-ith;  and 
on  the  31st  of  October  the  meeting  was  held,  and  a  resolution 
passed  that  the  minutes  of  themeetingof  the  24th  be  "passed, 
confirmed  and  ratified." 

It  was  held,  that  the  notice  of  the  25tli  of  October  was  in- 
valid in  law,  because  it  did  not  specify  the  resolutions,  the 
intended  confirmation  of  which  it  gave  notice;  and  hence  that 
the  resolution  of  the  31st  of  October,  and  the  dismissal  of  the 
minister,  purported  to  have  been  thereby  effected,  were  also 
invalid.  1 

Wliere,  by  the  laws  of  the  society,  it  is  necessar}'  that  notice 
shall  be  given  to  the  society  of  the  object  of  the  proposed 
meeting,  the  proceedings  of  a  meeting  expelling  a  member, 
held  in  pursuance  of  a  notice  which  omitted  to  state  the  ob- 
ject of  the  meeting,  are  void,  under  the  positive  provisions  of 
its  laws,  because  of  such  omission.^ 

Independent  of  the  positive  provisions  of  the  laws  of  a 
society,  in  order  properly  to  exercise  the  right  of  the  expulsion 
of  a  corporator,  notice  must  be  given   to  all  the  members  of 

'Dean  v.  Bennett,  L.  R.  9  Eq  -Weber  v.  Zimmerman,  23  Md. 
625.  156. 


Chap.  3,  §71.]  membership.  89 


the  tribunal  before  which  he  is  to  be  tried,  that  it  is  intended 
to  consider  the  question  of  removing  the  particular  person. 

"Where  the  power  of  expulsion  is  in  the  society  at  large, 
notice  must  be  given  to  all  the  members  of  the  society;  and 
when  the  power  is  in  a  select  body,  each  member  of  such  body 
must  be  notified.' 

§71.  Same  subject  continued.  In  giving  notice  of 
a  meeting,  it  is  not,  generally,  necessary  to  state  what  busi- 
ness is  to  be  transacted,  when  it  relates  only  to  the  ordinary 
affairs  of  the  corporation ;  but  when  it  is  for  the  purpose  of 
■expelling  a  member,  that  fact  should  be  stated;  for  members 
who  might  think  that  their  attendance  was  unnecessary  for  the 
■usual  routine  of  business,  will,  perhaps,  feel  it  their  duty  to 
attend  a  matter  involving  the  rights  of  a  fellow  member. 
The  notice  should  be  given  in  the  manner  prescribed  by  the 
charter  or  by-laws,  or,  in  the  absence  of  any  such  provisions, 
by  personal  notice  to  the  members  of  the  tribunal. 

"^When  it  is  intended  to  expel  a  member,  it  is,  in  general, 
absolutely  necessary,  not  only  that  he  should  be  summoned 
generally  to  attend,  but  that  he  should  also  be  notified  to 
answer  the  particular  charges  alleged  against  him;  for  it  would 
be  highly  uTijust,  upon  a  general  summons,  to  expel  a  mem- 
ber for  a  particulai  offense,  when  he  has  no  notice  to  prepare 
his  answer  to  the  charge. 

It  is  only  necessary  that  the  notice  shall  be  sufficient  to  ap- 
prise the  accused  of  the  nature  and  extent  of  the  charge 
against  him.'' 

It  is  too  late  to  question  the  sufficiency  of  the  notice  to  ap- 
pear and  answer  the  charge,  after  the  party  has  appeared  in 
person,  proceeded  with  the  investigation,  and  made  no  pre- 
tense that  he  had  not  had  time  to  prepare  for  trial,' 

A  society  claimed  that  a  member  had  been  suspended  after 
having  received  notice  under  an  article  of  its  by-laws,  which  was 
as  follows:  "  A  member  who  does  not  pay  his  dues  and  assess- 
ments to  the  lodge  within  four  weeks  after  the  quarter,  shall 
be  notified  to  pay,  the  same  within  fourteen  days,  and  if  he 
does  not  pay  he  shall  be  considered  in  arrears,  and  he  is  not 

'For  law  to  prevent  surivise  and  Baptist  Church,  8  Met.  (Mass.)  312; 

fraud  in  election  and  expulsion,  see.  Stow  v.  Wyse.  7  Conn.  214 ;  2  Bacon's 

Re.x    V.   May   and   Rex  v.    Little   5  Abridg.    462-463. 

Burr  2682;  Kynaston  v.  Mavor  etc.  -Gardner  v.  Freemantle,  19  W.  R. 

2  Strange   1051 ;  Macliell   v.'  Mayor  256. 

etc.,  2  Ld.  Raym.    1355;    Wiggin"  v.  ^ch^ge  v.  Cheney,  58  111.  509. 


90  iMEMKERsiiip.  [Ctiap.  3,  §72. 

entitled  to  lodge  benefits.  A  member  so  in  arrears  shall  be 
notified  by  the  secretary,  in  writing,  to  pay  within  thirty  days, 
in  default  whereof  the  member  shall  be  suspended," 

The  dues,  as  to  which  the  member  was  delinquent,  were  for 
the  two  quarters  ending  respectively  June  30  and  September 
30.  The  only  notice  sent  to  the  member  in  relation  to  the 
dues  for  the  quarter  ending  June  30,  as  shown  by  the  record, 
was  mailed  to  him  May  22,  which  was  long  before  those  dues 
were  payable.  The  only  other  notice  shown  to  have  been  sent 
him  in  relation  to  the  dues  of  either  quarter,  was  mailed 
October  22,  and  that  notice  required  the  payment  of  the  dues 
of  both  quarters.  It  was  not  shown,  "as  to  the  dues  of  either 
quarter,  that  after  the  member  had  failed  to  make  payment 
within  four  weeks  after  the  quarter,  he  was  notified  to  pay 
within  fourteen  days,  and,  failing  to  make  payment  within 
that  time,  reached  that  stage  of  the  proceedings  where  he  could 
be  "  considered  in  arrears,"  and  after  becoming  so  "  in  arrears," 
he  was  again  notified  to  pay  within  thirty  days,  and  made 
default  in  payment  during  all  that  period.  By  the  terms  of 
the  above  by-law,  each  of  these  steps  was  clearly  essential  to 
valid  suspension.  "  It  was  necessary  to  wait  four  weeks  after 
the  expiration  of  the  quarter,  and  then  if  the  dues  were 
unpaid,  to  notify  the  delinquent  to  pay  within  fourteen  days. 
If  he  still  remained  delinquent,  he  was  to  be  considered  in 
arrears,  and  when  so  in  arrears,  he  was  to  be  again  notified  to 
pay  within  thirty  days  thereafter,  and  it  was  only  when  the 
delinquency  had  extended  to  the  termination  of  this  latter 
period,  that  sentence  of  suspension  could  be  pronounced."' 

If  an  individual  chooses  to  belong  to  a  society  which  holds 
its  regular  meetings  on  Sunday,  and,  at  such  a  meeting,  he  is 
served  with  a  notice  to  attend  the  next  meeting,  it  does  not 
rest  with  him  to  make  the  objection  that  such  notice  is  illegal 
because  it  was  served  on  Sunday.  ^ 

§  73.  Tribunal  of  the  society  expelling:  a  mem- 
ber. The  power  of  expulsion  must  belong  to  the  society  at 
large,  unless,  by  the  fundamental  articles,  or  some  by-law 
founded  on  these  articles,  it  is  transferred  to  a  select  number.* 

A  return  to  a  fnandmnus,  which  states  that  the  member  was 
tried  and  expelled  by  "  a  select  number  "  of  the  society,  is 

'  District    Grand    Lodge,   etc.,  v.  ^  Commonwealth  v.   German  So- 

Cohn.    20  111.  App.     335.  ciety,  15  Pa.  St.,  254;  State  ex  rel  v. 

^  Corriffan  v.  Father  Mathew  Ben.  Chamber  of  Commerce,  20  Wis.  63, 
Soc.  65  Barb.    357. 


Chap.  3,  §T2a.]  membership.  91- 

insufficient  unless  it  further  shows  the  authority  of  that 
"  select  number.'" 

Where  the  organic  law  of  a  corporation  provides  that  such; 
society  "  shall  have  the  right  to  admit  as  membei's  such  per- 
sons as  they  may  see  fit,  and  expel  any  members  as  they  may 
see  lit,"  the  power  of  expulsion  resides  in  the  corporation  at 
large,  and  may  not  be  delegated  to  a  select  committee  or  board 
of  directors. i 

But  where  the  charter  confers  the  power  to  expel  "  such< 
persons  as  the  association  may  see  lit,  in  manner  to  be  pre- 
scribed by  the  rules,  regulations  and  by-laws  thereof  "—a  rule 
prescribing  the  mode  of  expulsion  by  a  trial  before,  and  a  vote 
of,  the  board  of  directors,  is  justified  by  the  language  of  the 
charter.' 

No  corporation  has  the  power  to  delegate  to  an  outside  body 
the  power  of  expelling  a  member. 

Where  various  corporations  send  delegates  to  a  grand  coun- 
cil, whose  powers  in  the  premises  are  not  derived  from  the 
incorporation  laws  of  the  State  in  which  these  corporations 
exist,  it  has  no  jurisdiction  to  expel  members  of  these  corpora- 
tions, or  to  review  the  proceedings  in  expulsion,  which  may 
have  taken  place  in  any  of  these  corporations." 

On  the  trial  of  a  member  of  a  lodge  before  a  committee,  an 
irregularity  in  the  appointment  of  the  committee  under  the 
by-laws,  is  waived  by  the  appearance  of  the  accused,  who,, 
having  knowlege  of  the  irregularity,  does  not  object  thereto.^ 

Where  a  member  of  an  association  appears  before  a  tribunal 
thereof,  charged  with  violating  its  rules,  and  submits  his  case  to 
them,  without  objection  to  the  manner  in  which  the  tribunal 
is  constituted,  all  irregularities  in  the  constitution  of  the 
tribunal  are  waived.' 

§  72a.  The  laws  of  a  society  provided  that  its  governing  com- 
mittee, to  which  its  government  and  management  was  confided, 
should  consist  of  twenty-four  members,  and  that  a  two-thirds 
vote  of  the  ijovernino^  committee  should  be  necessarv  for  the 
expulsion  or  suspension  of  a  member.    At  the  time  when  certain 

'  Green  v.  Society,  1  Sar.  &  R.,  254.  United  "Workmen,  etc.,  47  Mich.  429 ;. 

-'  State  v.  Chamber  of  Commerce.  State  v.  Miller,  OG  Iowa  2G;  23  N.  W.. 

20  Wis.  63.  Rep.  241. 

^  Pitcher  v.  Board  of  Trade,  111.;  '  Appeal  of  Sperrv,  Pa.  St.,  9  Atl. 

13N.E.  Rep.  187;  State  V.Milwaukee  Rep.    478;    People'  ex    rel.  v.    St. 

Chamber  of  Commerce,  47  "Wis.  C70.  George's  Society,  28  Mich.  201. 

*  Allnut  V.  Foresters.  Mich. ;  28  N.  *  Pitcher  v.  I^oard   of  Trade,  111.;. 

W.  Kei).  802;  see  als^o  Lamphere  v.  13  N.  E.  Rep.,  187. 


"92  MEMBERSHIP.  [Chap.  3,  §73. 

■proceedings  in  expulsion  were  taken,  tlie  committee  had  been 
reduced  in  number  to  twenty  members,  and  but  eighteen  were 
present  when  the  vote  for  the  expulsion  took  place.  Fourteen  of 
the  members  who  were  present  voted  in  favor  of  the  adoption  of 
the  resolution  of  expulsion,  and  the  other  four  voted  against 
it.  The  resolution,  therefore,  failed  to  secure  the  vote  of  two- 
thirds  of  the  members  of  the  governing  committee;  for  to  con- 
stitute such  a  vote,  that  of  sixteen  of  the  members  was  neces- 
sary. The  judgment  of  expulsion  in  this  case  was  irregular 
and  illegal.' 

Two  members  of  a  club  had  a  quarrel,  and  one  used  abusive 
language  toward  the  other.  For  this  he  was  tried  and  expelled. 
One  of  the  members  of  the  tribunal  which  expelled  him,  was  a 
distant  relative  (cousin)  of  the  wife  of  the  person  to  whom  the 
abusive  language  was  addressed,  and  the  expelled  member 
brought  suit  to  have  the  resolution  of  expulsion  declared  null 
and  void. 

The  court  held,  that  although  proceedings  in  expulsion  must 
be  characterized  by  honesty  and  good  faith,  yet  such  relation- 
ship does  not  disqualify  the  member  of  the  tribunal  from  taking 
part  in  the  proceeding,  under  the  rules  applicable  in  courts  of 
law  in  case  of  the  consanguinity  or  affinity  of  a  judge  to  either 
of  the  parties,  since  the  proceeding  is  not  before  a  legal 
tribunal,  nor  inter  partes^  but  is  of  a  quasi  judicial  character, 
by  the  club,  in  the  way  of  discipline  against  the  offending 
member.  ^ 

The  mere  fact  that  members  of  the  tribunal  have  become 
familiar  with  the  subject  matter  of  the  charges  to  be  investi- 
gated, through  conversations  with  members  of  the  society  and 
otherwise,  does  not  disqualify  them  from  serving,  nor  sustain 
a  charge  that  they  were  biased  or  prejudiced  against  the  party 
expelled.^ 

The  court  of  a  society  need  not  observe  any  of  the  rules  of 
law  as  to  challenge  of  jurors." 

§  73.  Right  to  trial  by  jury  does  not  apply 
to  proceeding's  in  expulsion.  The  constitutional  pro- 
visions relative  to  the  right  of  trial  by  jury  do  not  apply  to 
proceedings  taken  by  an  incorporated  society  for  the  expulsion 
of   a  member  for  offenses  within  its  jurisdiction,  but   only 

'  Loubat    V.     Le   Roy,    40     Hun  ^  Loubat  v.  Leroy,   15  Abb.  New 

<]Sr.Y.),  546.  Cases,  1. 

«  Loubat  V.  Leroy,  15  Abb.  N.  Cas.  •»  Chase  v.  Cheney,  58  111.,  509. 
<N.  Y.),  1. 


Chap.  3,  §74.]  membership.  93^ 

apply  to  trials  of  issues  of  fact  in  civil  and  criminal  pro- 
ceedings in  courts  of  justice.  They  have  no  application  to- 
incorporated  societies  which  have  the  power  of  expulsion  or  dis- 
franchisement, nor  to  any  bodies  not  exercising  the  ordinary 
jurisdiction  of  courts;  nor  to  collateral  or  incidental  proceed- 
ings, which  are  disciplinary  in  their  character,  by  associations 
authorized  by  law,  as  to  the  conduct  of  their  members  who 
have  voluntarily  submitted  themselves  to  their  jurisdiction.^ 

§  74.    Regularity  of  proceedings  in  expulsion. 

Under  articles  providing  for  the  appointment  of  a  commit- 
tee of  investigation  by  the  presiding  otticer,  without  directing 
how  or  when,  an  appointment  made  immediately  after  the  ad- 
journment of  the  meeting  which  passed  the  resolution  of  refer- 
ence, by  the  second  vice-president  who  had  presided  at  that 
meeting,  and  a  subsequent  appointment  by  the  tirst  vice- 
president  to  the  places  of  two  members  first  appointed  who 
had  refused  to  act,  are  not  open  to  objection  as  to  the  source 
or  time  of  the  appointments.' 

A  member  was  notified  that  on  a  certain  night  he  would  be- 
tried  by  his  lodge  upon  certain  charges.  He  thereupon  noti- 
fied the  principle  officer  of  the  lodge  that,  o\ving  to  certain^ 
duties  which  he  was  obliged  to  perform  as  county  sur- 
veyor, he  could  not  be  present  at  the  time  and  place  fixed  for 
the  trial  of  the  charges.  He  made  no  application  for  a  con- 
tinuance based  on  proof  of  the  fact  that  he  had  public  duties 
to  perform  at  that  time.  He  was  tried  at  the  time  set,  and 
expelled.  The  court  held  that  the  notice  to  the  priiicipal 
officer  was  not  of  itself  sufficient  to  oust  the  lodge  of  jurisdic- 
tion to  try  the  member  on  the  charges  at  the  appointed  time- 
and  place." 

A  society  has  no  right  to  expel  a  member  merely  because  he- 
does  not  appear,  and  without  proving  the  charges  against  him. 
Even  though  the  party  charged  does  not  appear,  still,  proof  of 
his  offense  should  be  required.^ 

In  Rex  V.  Faversham,  S  T.  R.  356,  the  return  to  the  man- 
ddinus  was  quashed  because  the  member  had  been  removed 
without  proof  of  the  offense  wherewith  he  was  charged,  his 
presence  and  failure  to  deny  the  charge  having  been  taken  in- 
stead of  proof. 

'People  V.  N.  Y.  Com.  Association,  ^iiobinson  v.  Yates  City  Lodge,  8ft 

18  abb.  Pr.  (N.  Y  )  271 :  In  re  Newell  111.    598. 

Smith,  10  Wend.  ( X.  Y.)  449.  •'People  v.  Benevolent  Soeiety,  65- 

-People    ex    rel.  v.   St.  George's  Barb.,  357 
Society,  28   Mich.,  261. 


'94  MEMBERSHIP.  [Chap.  3,  §75. 

"Where  an  incorporated  society,  in  its  by-laws,  ado])ts  the 
srules  in  Cushing's  Manual  for  the  government  of  all  debates 
of  its  members,  and  no  other  provision  is  made  on  that  sub- 
ject in  the  by-laws,  Cushing's  Manual  must  control  the  mem- 
bers of  the  society  in  that  matter.  That  provides  that  if  offen- 
sive words  are  not  taken  notice  of  at  the  time  they  are  spoken, 
but  the  member  is  permitted  to  finish  his  speech,  and  then 
any  other  person  speaks,  or  any  other  matter  of  business  inter- 
venes before  notice  is  taken  of  the  words  which  gave  olfense, 
the  words  are  not  to  be  written  down,  nor  the  member  using 
them  censured.  Therefore,  where  a  member  in  debate,  at  a 
meeting  of  the  society,  uses  what  are  considered  offensive  and 
improper  words  which  are  not  objected  to  or  noticed  at  the  time, 
or  during  the  meeting,he  may  not  be  tried  and  expelled  for  using 
those  words,  upon  charges  made  at  a  subsequent  meeting,  even 
though  the  use  of  such  words  was,  under  the  charter  and  by- 
laws, a  sufficient  cause  of  expulsion.  An  expulsion  under  such 
circumstances  is  irregular  and  without  authority.' 

When  a  member  appears  before  the  tribunal  of  a  society, 
charged  with  violating  its  rules,  and  submits  his  case,  without 
objection  to  the  mode  of  its  proceeding,  all  irregularities 
therein  are  deemed  to  be  waived.^ 

§  '75.    Reg^ularity    ot     proceedings    continued. 

When  a  member  has  been  regularly  tried  before  an  incorpor- 
ated society  which  requires  a  two-thirds  vote  of  the  mem- 
bers present  to  expel  a  member,  and  more  than  one-third  of 
the  members  present  vote  against  the  resolution  to  expel  him, 
this  amounts  to  an  acquittal.  A  subsequent  trial  and  expul- 
sion, on  the  same  charges,  for  the  same  offense,  is  irregular  and 
void. 

A  member  who  has  been  regularly  tried  and  acquitted  by  a 
society,  may  not  be  twice  put  in  jeopardy  before  the  society 
:for  the  same  offense.^ 

But  where  a  member  has  been  irregularly  and  illegally  ex- 
pelled from  a  society,  the  society  may  set  aside  and  annul  the 
void  proceedings,  restore  the  member,  and  proceed  against 
him  regularly  for  the  same  offense.' 

'People  V.  American  Institute,  44  merce,  47  Wis.  670;  But  see  Otto  v. 

*How.  Pr.  468  Benevolent  Union,  Cal.  17  Pac.  Rep. 

-Pitcher  v.  Board  of  Trade,  111.,  13  217,  where  the  reinstatement  of  tlie 

N.  E.  Rep.  187.  member  for  the  purpose   of  expel- 

^  Commonwealth  V.  Guardians  of  lina;  him  a^ain  was  taken  as  evidence 

(poor,  6  Sar.  &  R.  (Pa.)  469.  of  bad  faith. 

^  State  ex  rel.  v.  Chamber  cf  Com- 


Chap.  3.  §T5.]  membership.  95 

In  the  absence  of  any  fixed  rules  of  procedure  in  the  con- 
stitution and  by-laws  of  a  society,  the  question  is  not  whether 
the  proceedings  for  the  hearing  and  expulsion  of  a  nieinl)er 
might  not  have  been  conducted  differently,  and  more  in  con- 
formity with  those  which  obtain  in  courts,  under  statutes  and 
fixed  rules,  but  whether  or  not  the  principles  of  natural  jus- 
tice have  been  violated  in  withholding  from  him  a  fair  and 
inpartial  hearing,  before  the  passage  of  the  resolution  for  his 
expulsion.  So  long  as  he  has  had  notice,  and  an  opportunity 
to  be  fully  heard,  he  can  have  no  reasonable  ground  of 
complaint  on  account  of  this  or  that  omitted  step  or  form,  on 
the  part  of  the  tribunal  thus  acting  quasi-judicially. 

Courts  will  take  cognizance  of  the  right  of  a  tribunal  to  pro- 
ceed with  the  trial  of  a  member,  but  not  of  matters  which 
relate  to  the  mode  of  procedure. ' 

They  will,  therefore,  take  no  cognizance  of  a  refusal  of  the 
tribunal  to  issue  a  commission  to  take  testimonv;  of  its  re- 
fusal to  grant  anew  trial';  of  the  alleged  misconduct  of  a  mem- 
ber of  the  tribunal,  etc, ;  these  being  matters  which  relate  to 
the  mode  of  proceeding,  and  not  to  the  right  to  proceed. 

And  for  the  same  reason,  they  will  not  consider  the  fact 
that  the  witnesses  were  not  sworn  when  examined  by  the  trib- 
unal, where  the  contract  does  not  expressly  provide  that  they 
shall  be  sworn.' 

Where,  under  the  constitution  and  by-laws  of  an  unincorpor- 
ated mutual  benefit  society,  charges  are  pi-eferred  against  a 
member  who  is  apparently  and  actually  of  unsound  mind,  his 
failure  to  appear  and  answer  is  not  excused  by  his  insanity, 
and  the  society  may  regularly  proceed,  according  to  its  laws, 
to  convict  him  of  neglect  to  appear,  and  punish  him  bv  ex- 
pulsion and  the  loss  of  all  rights  in  the  society.  In  consider- 
ing this  question  the  Court  said:  "It  is  clainied  that  Pfeiffcr, 
being  apparently  and  actually  of  unsound  mind,  could  not  be 
duly  summoned  or  convicted  of  neglect  to  appear,  and  pun- 
ished by  expulsion  and  the  loss  of  all  rights  in  the  society. 
There  is  no  force  in  this  point.  A  person  who  has  even  been 
adjudged  a  lunatic,  and  of  whom  a  committee,  both  of  ]>erson 
and  estate,  has  been  apjiointed,  may  be  sued  at  law,  and  the 
judgment  recovered  against  him  is  not  void.  It  would  be  a 
contempt  of  the  court  which  appointed  the  committee  to  sue 
without    leave,  but  the  judgment  is    valid.     There    was    no 

'Walker  v.  WainriLjht,  16   Barb.        •''State  ec  rel.   v.   Aliromoiiior  eti- 
486;  Chase  v.  Cheney,  58  111.  509.  Verein.  3  Ciri.  Law  Bull.  295. 

'Walker  v.  Wainright,  supra. 


96  MEMBERSHIP.  [Chap.  3,  §76. 

reason  why  the  lodge  should  not  proceed  against  a  person  not 
adjudged  a  lunatic.  He  could  have  been  defended  and  his 
rights  protected.  If  they  were  not,  the  lodge  might  regularly 
proceed  according  to  its  laws.  His  alleged  insanity  did  not 
excuse  his  failure  to  appear."  ' 

The  judgment  of  a  proper  tribunal  of  a  society,  in  trying 
a  member  on  charges  which,  by  its  constitution  and  by-laws,  it 
was  authorized  to  try,  will  not  be  examined  into  by  a  court  on 
the  weight  of  evidence,  or  its  competency.'' 

^  KG.  Regularity  of  proceeding's  continued. 
When  the  laws  of  a  society  provide  that  a  member  may  be 
expelled  for  refusing  to  comply  with  the  decision  and  order  of 
its  tribunal,  in  any  matter  submitted  to  the  tribunal  under  the 
by-laws,  it  is  error  to  expel  a  member  for  such  refusal,  when 
he  has,  under  the  by-laws,  appealed  from  the  decision  of  the 
tribunal  to  the  society  at  large. 

"When  a  member  has  submitted  a  controversy  to  such 
tribunal,  and  appealed  from  its  decision,  under  the  provision  of 
the  by-laws,  giving  the  right  of  appeal,  the  society  has  no  right 
to  proceed  against  him  for  a  failure  to  comply  with  such  deci- 
sion, and  the  denial  to  him  of  his  right  of  appeal  from  such 
decision  is  an  irregularity  and  an  erroi-,  from  the  effects  of 
which  a  court  of  equity  will  afford  him  relief." 

A  court  of  equity  has  jurisdiction  of  causes  of  action  within 
the  control  of  the  tribunals  ordained  by  the  constitution  and  by- 
laws of  an  unincorporated  society,  where  some  material  irregu- 
larity in  the  proceedings  is  shown  to  have  occurred,  which  has 
not  been  waived  by  the  suitor. 

The  exclusion  of  a  competent  witness  offered  by  the  accused, 
on  the  ground  that  he  is  incompetent,  is  a  mistake  of  judg- 
ment, and  not  an  irregularity  of  procedure.  If,  on  appeal  to 
the  higher  tribunals  of  the  lodge,  the  expelled  member  omits 
to  complain  of  this  mistake,  he  waives  any  right  to  have  the 
error  inquired  into  in  a  court  of  equity.* 

But  it  is  certainly  true,  as  urged  in  the  dissenting  opinion  of 
Justices  Green  and  Trunkey,  in  the  case  just  cited,  that  where 
it  is  evident  from  the  whole  facts  surrounding  the  case  that  the 
exclusion  of  the  witness  took  place,  not  as  a  mistake  of  judg- 
ment, but  as  a  part  of  a  plan  to  exclude  the  member  from 
benefits  to  which  he  was  justly  entitled,  and  in  bad  faith 
toward  the  accused,  then  the  court  should  reinstate  the  expelled 

>  PfeifEer  V.  Weishaupt,  13  Daly  ^Powell  v.  Abbott  et  al,  9 
161.  Weekly  Notes  of  Cases,  231. 

-  Blumenthal  V.  Chamber  of  Com-  •'Appeal  of  Sparry,  Pa;  9  Atl. 
merce,  7  Cin.  Law  Bull.  327.  Rep.  478. 


Chap.  3,  §78.]  membership.  07 

member.  While  every  presumption  is  in  favor  of  the  fair- 
ness of  proeeedinojs  in  expulsion,  still  where  a  member's  judges, 
jurors,  accusers  and  debtors,  are  one  and  the  same — namely, 
the  society  to  which  he  belongs,  mistakes  of  judgment  upon 
the  trial  must  not  be  so  gross  and  inexcusable  as  to  lead  to  the 
conclusion  that  they  were  intentional.  If  they  are,  the  member 
should  be  reinstated. 

§  77.  Statute  of  limitations.  In  the  absence  of  any 
provision  on  the  subject  in  the  constitution  and  by-laws  of  a 
society,  there  is  no  limitation  as  to  time,  to  the  inquiry  by  the 
society  as  to  offenses  under  its  laws;  the  statute  of  limitations 
does  not  govern  such  inquiry,  unless  it  be  made  a  part  of  the 
laws  of  the  society.' 

§  78.     Good  faith  in  proceeding's  in  expulsion. 

Malice,  though  not  a  crime,  is  a  quasi  crime,  and  is  never  to 
be  presumed  by  the  courts.  It  must,  when  relied  upon  as 
invalidating  an  expulsion,  be  charged  and  proved  specifically. 
The  books  speak  of  malice  on  the  part  of  committees  and 
societies  in  matters  of  expulsion;  and  in  ap])lications  for 
reinstatement  to  membership  and  suits  for  damages  for  wrong- 
ful expulsion,  there  are  usually  strong  allegations  of  malice 
and  bad  faith  in  the  proceedings  of  expulsion;  and  yet  in  the 
adjudicated  cases  there  is  little  said  upon  the  subject  of  malice 
and  bad  faith,  except  the  decision  of  the  court  that,  in  the 
particular  case  in  hand,  there  is,  or  is  not,  sufficient  evidence 
of  malice  and  bad  faith  to  set  aside  the  expulsion. 

It  has  never  been  decided  whether  malice  may  be  shown  l)y 
proving  that  each  individual  was  independently  actuated  by 
malice,  or  whether  it  must  be  further  shown  that  the  members- 
of  the  tribunal,  whether  composed  of  a  committee  or  the  whole- 
society,  had  combined  together,  and  agreed  upon  an  illeg;d  pi'o- 
ceeding. 

Where  malice  and  bad  faith  in  the  proceedings  in  expulsion 
are  charged,  the  court  will  permit  the  members  of  the  tribunal 
to  testify  as  to  the  motives  under  which  they  acted  in  such 
proceedings — will  permit  them  to  give  their  reasons  for  vot- 
ing in  favor  of  the  expulsion  of  the  member,  and  to  declare 
that  they  did  not  exercise  their  power  capriciously,  corruptlv, 
unjustly  or  maliciously.  They  may  also  state  that  they  acted 
bona  fide,  and  were  not  intluenced  by  the  persons  pressing  the 
charges.'' 

'  Chase  v.  Cheney,  58  111.,  509.  Rep.  (N.  S.)  642;    Gardner  v.   Free- 

"Lyttleton  v.  Blackburn,  33  L.  T.    mantle,  19  W.  K.,  256. 

7 


98  MEMBERSHIP.  [ClIAP.  3,  §79 


Membership.— Part  V. 

Sec.  79.  Reinstatement  of  member  to  his  rights.  Remedies  provided 
for  the  expelled  member  in  the  laws  of  the  society. 

Sec.  80.    Delay  or  unjust  procedure  of  superior  tribunal  of  society. 

Sec.  81.     Appeal  to  superior  tribunal,  "  whose  decision  shall  be  final." 

Sec.  82.     Death  of  member  pending  his  appeal. 

Sec.  83.     Action  against  society  for  damages  for  wrongful  expulsion. 

Sec  84.     EflEect  of  action  for  damages  for  wrongful  expulsion. 

Sec.  85.    Injunction  to  restrain  illegal  expulsion. 

Sec.  86.    Injunction  to  reinstate  expelled  member. 

Sec  87.  Decree  of  court  reinstating  member  must  be  presented  to 
society. 

Sec.  88.  Subordinate  society  refusing  to  obey  orders  of  superior 
body. 

SFr'  00*  [  Records  of  proceedings  in  expulsion. 

Sec  91.     Double  sentence  of  society  in  judgment  upon  members. 

§  79.  Keiiistatement  of  member  to  his  rights. 
Kemedies  provided  for  tlie  expelled  member  in 
the  laws  of  the  society.  Where  a  voluntary  society 
provides,  in  its  charter,  constitution  or  by-laws,  a  mode  for  re- 
viewing and  correcting  any  error  or  injustice  on  the  part  of 
any  subordinate  tribunal  by  which  a  member  has  been  tried 
and  expelled,  he  is  bound  to  avail  himself  of  the  remedy  so 
provided,  before  he  may  ask  a  court  of  equity  to  investigate  the 
regularity  of  the  proceedings.  These  proceedings,  being  sub- 
ject to  review,  may  be  annulled  by  the  action  of  the  tribunals 
created  in  the  society  and  clothed  with  authority  to  investigate 
the  proceedings  of  such  subordinate  tribunals;  and  those  who 
fail  to  avail  themselves  of  the  opportunity  thus  offered  to  cor- 
rect these  irregularities  within  the  society,  will  be  repelled 
from  the  courts. 

Courts  will  not  in  any  wise  interfere  with,  or  inquire  into 
the  affairs  of  such  societies  until  they  are  obliged  to  act,  and 
until  the  aggrieved  member  has  exhausted  all  the  remedies 
provided  in  the  society.  It  is  not  necessary  that  the  laws  of 
the  society  shall  provide  in  express  terms  that  the  member 
must  appeal  from  the  decision  expelling  him,  to  a  higher 
tribunal  in  the  society,  before  seeking  restoration  in  a  court 
of  justice;  the  mere  right  to  appeal  from  such  decision,  for 
the  reasons  above  stated,  creates  a  duty  on  the  part  of  the  ex- 
pelled member  to  exhaust  his  right  of  appeal  in  the  society.' 

'Karcher  v.  Supreme   Lodge    K.  Hun(N.  Y.)49;  White  v.  Brownell, 

of  H.  137  Mass.  368;  Harrington  v.  2  Daly  329;  Lafond  v.  Deems,  81  N. 

Workingmen's  Ben.  Association,  70  Y.  507. 
Ga.   340;  Poultney  v.  Bachman,   31 


OhAP.  3,  §79.]  MEMBERSHIP.  90 

There  is  no  presumption  that  there  is  open  to  the  expelled 
member  a  remedy,  under  the  constitution  and  laws  of  the 
-association  itself,  for  a  review  of  the  proceedings  in  his  expul- 
sion, and,  in  case  of  error,  for  his  reinstatement.  This  must 
be  made  to  appear.' 

It  has  been  held  that  this  rule  only  applies,  in  its  strictness, 
to  those  cases  in  which  the  right  is  given,  of  appeal  to 
an  officer  or  a  tribunal  other  than  the  tribunal  which  con- 
victed and  expelled  the  member.  When  the  remedy  provided 
in  the  society  is  not  in  the  nature  of  an  appeal  to  a  higher 
officer  or  body,  or  to  a  superior  tribunal,  but  is  merely  in  the 
nature  of  a  petition  for  a  rehearing  to  the  same  persons  who 
convicted  and  expelled  the  member,  the  court  will  examine 
into  facts  concerning  the  trial  and  expulsion,  and  determine 
whether,  under  all  the  circumstances,  the  aggrieved  member 
should  have  apj)lied  to  them  for  a  reconsideration  of  the  case 
upon  its  merits  before  resorting  to  the  court. 

A  resolution  of  expulsion  was  adopted  by  the  governing 
committee  of  a  society,  by  a  vote  of  fourteen  to  four,  upon 
the  report  of  a  committee  of  tiv^e  of  its  members,  who  had 
been  appointed  to  investigate  and  report  as  to  the  facts.  The 
by-laws  of  the  society  provided  that  in  cases  of  expulsion  the 
expelled  member  might  make  an  application  to  the  governing 
committee  for  a  rehearing.  The  expelled  member,  however, 
without  making  such. an  application  as  he  was  authorized  to 
do  by  the  by-laws,  resorted  to  the  court.  It  was  claimed  that, 
before  bringing  the  action,  the  plaintiff  should  have  applied 
to  the  committee  to  have  the  resolution  of  expulsion  recon- 
sidered and  revoked,  and  that,  in  consecjuence  of.  his  failure 
to  do  so,  the  court  would  refuse  to  interfere  in  his  behalf 
But  the  court, in  considering  this  question,  said:  "  The  resolu- 
tion which  they  (the  members  of  the  governing  committee) 
adopted,  conclusively  establishes  the  fact  that  they  had  formed 
and  acted  upon  convictions  adverse  to  tlie  plaintiff,  and,  after 
that,  the  prol)ability  is  extremely  slight,  indeed,  that  they 
could  have  been  induced  to  change  their  views  and  act  differ- 
ently upon  an  application  for  the  reconsideration  of  the  reso- 
lution. The  probability  that  favorable  action  might  in  this 
manner  have  been  secured  by  the  ]ilaintiif  is  so  extremely 
remote  that,  in  the  reasonable  administration  of  the  law,  he 
should  not  be  held  to  be  recpiired  to  apply  for  such  reconsid- 
eration before  commencing  an  action  to  restrain  the  enforce- 

-■Olery  v.  Brown,  51  How.  Pr.  02. 


100  MEMBEKSiriP.  [ClIAP.  3,  §80. 

inent  of  the  resolution  against  him,  if  that  should  turn  out  ta 
have  been  unlawfully  adopted.'" 

This  distinction  is  not  sustained  by  analogy  to  proceedings 
in  courts  of  law,  for  a  motion  for  a  new  trial  is  required  to 
be  made  before  the  tribunal  in  which  the  trial  took  place, 
before  an  appeal  may  be  prosecuted.  It  is  but  fair  that  the 
tribunal  in  which  the  trial  took  place  should  have  an  oppor- 
tunity  to  correct  its  errors,  and  it  is  to  be  presumed  that  such 
tribunal  will  act  in  good  faith  upon  the  application. 

Because  the  members  of  a  tribunal  have  formed,  and  acted 
upon,  convictions  adverse  to  a  member,  it  must  not  be  assumed 
that  they  will  continue  to  hold  those  convictions  after  they 
have  looked  carefully  into  an  application  for  a  reconsideration 
of  their  acts  in  the  premises.  Every  presumption  is  in  favor 
of  the  fairness  and  honesty  of  a  tribunal  which  has  expelled 
a  member  from  a  society.  The  interests  of  the  fellow-mem- 
bers are,  naturally,  that  the  rights  of  each  individual  member 
should  be  sedulously  guarded,  as  the  same  measure  they  apply 
to  others  may  in  the  end  be  administered  to  themselves. 

The  obligation  to  appeal  to  the  higher  tribunals  within  the 
society  is  not  imposed  where  the  judgment  is  void  for  want 
of  jurisdiction.  Such  a  judgment  of  expulsion  may  be  likened 
to  a  judgment  rendered  by  a  court  which  has  no  jurisdiction 
of  the  subject  matter  or  the  person.  No  appeal  or  writ  of 
error  is  necessary  to  get  rid  of  such  judgment;  it  is  void  in 
all  courts,  and  in  all  places. 

Thus,  a  suspension  of  a  lodge  by  an  officer  not  vested  by  the 
laws  of  the  order  with  that  power,  and  without  notice  and 
opportunity  to  the  lodge  for  a  hearing,  is  absolutely  void,  and 
cannot  effect  the  legal  rights,  or  change  the  legal  status  of  the 
lodge  or  any  of  its  members,  and  from  such  an  order  of  sus- 
pension no  appeal,  in  the  mode  provided  in  the  laws  of  the 
order,  is  necessary  to  save  the  rights  of  the  lodge  or  its  mem- 
bers. * 

§  80.  Delay  or  unjust  procedure  of  a  superior 
tribunal  of  society.  If,  however,  when  he  has  appealed 
to  a  superior  tribunal,  the  member  is  practically  deprived  of 
the  benefit  of  such  remedy,  by  evasion,  intentional  delays,  or 
other  unjust  procedure  on  the  part  of  such  tribunal,  he  may 

'  Loubat  V.  Le  Roy,  Treas.  Union  °  Hall  v.  Supreme  Lodge,  24  Fed- 
Club,  40  Hun  (N.  Y.)  546.  Rep.  450. 


-Chap.  3,  §81.]  membership.  101 

resort  to  a  court  of  equity,  all  Biding  and  proving  such  evasion, 
delays,  or  other  unjust  procedure,  as  an  excuse  for  not  having 
exhausted  his  remedy  in  the  society.  But  it  must  clearly 
appear  in  such  a  case  that  the  appellate  tribunal  is  acting  in 
bad  faith  and  in  practical  disregard  of  the  member's  right  of 
appeal.' 

§  8 1.  Appeal  to  superior  tribunal  "  whose  decis- 
ion shall  be  iiiial."  The  constitution  of  an  unincorpor- 
ated society  provides  that  "  any  member  having  a  grievance, 
shall  have  the  right  to  lay  his  case  before  the  central  body,  who 
shall  take  action  thereon,  and  whose  decision  shall  be  final." 
A  member  of  the  society,  who  had  been  expelled,  ap])lied  to 
the  central  body  for  reinstatement  to  membership,  but  his  ap- 
plication was,  by  that  body,  denied.  He  then  instituted  a  pro- 
ceeding for  reinstatement  in  the  courts.  It  was  urged  that  the 
<jourt  had  no  jurisdiction,  and  upon  this  question  the  court 
said:  "  No  doubt  when  action  is  properly  taken  in  the  manner 
indicated,  it  is  final,  and  the  courts  will  not  interfere,  but 
when,  under  the  guise  of  remedying  the  grievance  of  a  mem- 
.ber,  the  central  body  acts  in  bad  faith,  and  maliciously  makes 
the  subject  of  the  grievance  a  pretext  for  oppression  and 
wrong,  its  actions  may,  however,  to  that  extent,  be  the  subject 
of  review."  '^ 

§  82.    Death  of  member  ijendiiig-  his  appeal.    A 

member  of  a  lodge  of  Knights  of  Honor  was  expelled  by  his 
lodge,  and  he  appealed  to  the  grand  dictator.  Pending  the 
appeal  he  died.  Subsequently  the  judgment  of  expulsion  was 
reversed  by  the  grand  dictator;  he  was  reinstated  by  vote  of 
the  lodge;  and  his  assessments  due  up  to  the  time  of  his  death 
M^ere  received. 

The  court  said:  "  H  the  analogies  of  the  common  law  are 
to  be  regarded,  the  appeal  did  not  abate  by  the  death  of  (the 
member).  Green  v.  Watkins,  6  "Wheat.  260.  By  the  reversal 
of  the  sentence  of  expulsion,  and  by  the  action  of  the  lodge,  he 
was  reinstated  as  at  the  date  of  his  expulsion;  and  was  enti- 
tled to  his  benefit.  It  may  be  added  that  such  was,  at  the 
time,  the  law  of  the  order,  which  had  held,  by  its  supreme  dic- 
tator, that  if  a  decision  of  expulsion  was  reversed  on  final 
appeal,  the  appellant  stands  a  member  as  if  there  had  been  no 
such  judgment,  and  he  must  pay  all  back  dues  and  assess- 

'  Carlen  v.  Drurv,  1  Ves  &  Beames        -  Otto  v.  Journeymen  Tailors'  etc. 
154.  (see  case);  White  v.  Browuell,     Union,  Cal;  17  Pac.  Rep.  217. 
a  Daly  329. 


102  MEMBERSHIP.  [ClIAP.  3,  ^83, 

ments;  and  if,  pending  the  appeal,  he  dies,  has  regularly  ten- 
dered his  dues  and  assessments,  and  after  death,  the  appeal  is 
decided  in  his  favor,  his  benefit  will  be  paid  as  one  who  died 
in  good  standing,  less  the  amount  of  his  tendered  and  unpaid 
dues  and  assessments.' 

§  83.  Action  agfainst  society  for  damages  for 
wrong:ful  expulsion.  A  member  of  a  corporation  may 
lawfully  sue  the  corporate  body  for  an  injury  which  he  sustains 
from  the  misconduct  of  its  otKcers  or  agents.^ 

Where  the  power  of  expulsion  is  delegated  to  a  select  body, 
— a  committee,  or  board  of  directors — the  society  is  to  be  con- 
sidered as  having  done  all  that  the  select  body  did  in  the  pro- 
ceedings in  expulsion. 

In  a  suit  for  damages  for  wrongful  expulsion,  it  is  not  suffi- 
cient for  plaintiff  to  aver  that  the  proceedings  of  expulsion 
were  irregular  and  void,  or  that  the  charges  against  him  were 
not  such  as  he  might  lawfully  be  expelled  for  under  the  con- 
tract of  membership,  or  that  he  had  no  notice  of  the  meeting 
at  which  he  was  expelled,  or  of  the  charges  against  him.  He 
may  not  sue  for  loss  of  membership  if  the  adjudication  is  void. 
In  such  a  case  his  remedy  would  clearly  be  to  enforce,  by 
mandamus,  a  right  he  still  has;  his  remedy  would  not  be  to 
get  damages  for  its  loss. 

But  where  a  society,  acting  upon  a  void  adjudication  of 
expulsion,  deprives  a  member  of  his  rights  as  such,  it  com- 
mits a  trespass  upon  him,  and  is  liable  in  damages  for  the 
trespass.  It  is  not  necessary  for  the  member  to  show  that 
he  was  assaulted  and  put  out  of  a  meeting  of  the  society,  or 
that,  in  attemptins:  to  enter,  he  was  violently  laid  hold  on  and 
kept  out.  It  is  sufficient  to  show  that  he  was  physically  kept 
out;  that  he  could  not  have  gone  in  without  bringing  about  a 
breach  of  the  peace  or  an  assault.  He  need  not  put  the  matter 
to  a  test." 

Where  it  is  merely  claimed  that  proceedings  in  expulsion 
took  place  in  the  society,  and  it  is  the  legal  effect  of  the  expul- 
sion, in  depriving  the  member  of  his  rights,  that  is  complained 
of,  it  is  necessary  for  the  plaintiff  to  aver  and  prove  that  his 

'  Marck  V.  Supreme  Lodge  K.  of        '^  Blumenthal  v.  Cincinnati  Cham- 

H.  29  Fed  Rep.  896.  ber  of  Commerce,  7  Cin.  Law   Bui. 

'  Gray  v.  Portland  Bank,  3  Mass.    327,     But  see  Innes  v.  Wylie,  1  Car. 

385.  &  Kir.  262. 


Chap.  3,  §84.]  memberspiip.  103 

expulsion  was  without  reason,  was  malicious,  and  in  bad  faith, 
in  order  to  entitle  him  to  damages.  ' 

§  84.  Effect  of  action  for  damages  for  wrongful 
expulsion.  The  bringing  of  an  action  Ijy  a  person  who  has 
been  illegally  expelled  from  an  incorporated  society,  to  recover 
damages  for  deprivation  of  his  rights  and  privileges,  is  a  waiver 
of  his  right  to  a  mandamus  to  restore  him  to  membership. 

A  member  of  an  incorporated  society  was  expelled,  without 
any  notice  to  him  or  knowledge  on  his  part.  After  such 
expulsion  he  brought  an  action  to  recover  damages  for  the  loss 
of  his  rights  and  privileges  as  a  member,  occasioned  by  such 
expulsion,  and  in  the  action  he  recovered  a  verdict  and  judg- 
ment for  $275.  While  this  cause  was  pending  in  error  in  an 
appellate  court,  the  member  sought  by  m,andamus  to  be 
restored  to  membership  in  the  society.  In  considering  the 
effect  of  the  action  for  damages  upon  the  application  for  the 
writ  of  manda77i us,  the  court  says:  "The  gravamen  of  this 
action  is,  that  by  the  expulsion  he  has  lost  all  the  rights  and 
privileges  of  membership.  That  being  true,  the  satisfaction 
of  his  judgment  is  compensation  for  all  he  has  lost,  and  noth- 
ing remains  for  which  he  can  complain  further.  But  without 
such  judgment,  if  he  brings  his  action  for  these  causes,  that 
action  is  based  upon  the  theory  that  he  has  lost  membership 
and  all  his  rights,  and  that  he  cannot  be  restored  thereto; 
otherwise  he  has  no  cause  of  action.  If  his  rights  are  not 
gone,  and  gone  irrevocably,  his  petition  is  not  true  when  it  says 
he  has  been  deprived  of  those  rights.  In  bringing  such  action, 
therefore,  in  order  to  maintain  it,  he  necessarily  abandons  all 
interest  in  the  society."" 

And  where  a  person,  formerly  a  meml)er  of  a  mutual  benefit 
society,  sues  the  society  for  benelits,  and  the  question  of  his 
proper  expulsion  is  inquired  into  and  determined  under  any  of 
the  issues  presented  in  the  case,  both  the  plaintitt'  and  the 
society  are  concluded  by  such  determination,  unless  the  decision 
is  appealed  from. 

An  expelled  member  commenced  an  action  against  the 
society    for   the   recovery    of   weekly  allowances.     His  claim 

'  The  remedies  of  a  member  for  sessments,"  under  the  head  of  "  lie- 
the  wrongful  refusal  of  the  society  fusal   of    society  to    accept   assess- 
to  accept  assessments  ujion  his  cer-  ments — remedy  of  member." 
tificate,  based  on  the  jjround  that  he  ^  State  ex  rel.  v.  Slavonska  Lipa  et 
is  no  longer  a  member  of  the  society,  al.,  28  Ohio  St.,  6G5. 
are  treated  of  in  the  chapter  on  "As- 


104  MEMBERSHIP.  [ChAP.  3,  §85. 

embraced  a  period  before  his  alleged  expulsion,  and  extending 
beyond  it.  Among  the  defenses  interposed  to  his  right  to 
recovery  was  that  of  the  plaintiff's  expulsion  prior  to  the 
bringing  of  the  suit  upon  his  claim. 

A  judgment  was  rendered  in -this  action  for  weekly  allow- 
ances up  to  the  date  of  his  expulsion,  but  his  claim  for 
beneiits  after  that  period  was  rejected.  Upon  the  trial  the 
record  of  plaintiff's  expulsion  was  given  in  evidence,  and  other 
evidence  was  also  given  touching  the  regularity  of  the  expul- 
sion under  the  rules  of  the  society. 

The  plaintiff  might,  perhaps,  have  avoided  a  decision  upon 
the  question  of  his  expulsion,  had  he  limited  his  claim  to  the 
time  of  the  alleged  expulsion,  and  could  then  have  properly 
invoked  the  aid  of  the  court  to  annul  the  record  of  his  expul- 
sion, if  he  had  sufficient  cause  therefor;  but  by  including  in 
his  claim  for  weekly  allowances  a  period  beyond  his  expul- 
sion, and  by  submitting  the  question  of  its  regularity  to  the 
decision  of  the  court  upon  the  trial  of  the  claim,  he  became 
bound  by  its  decision,  and  his  only  remaining  remedy  was  by 
appeal  from  the  judgment. 

Upon  application,  made  after  the  rendition  of  this  judg- 
ment, for  restoration  to  membership,  the  court  dismissed  the 
plaintiff's  complaint  upon  the  sole  ground  that  the  question  of 
his  expulsion  had  been  determined  against  him  on  the  trial  of 
his  claim.' 

When  a  matter  is  regularly  determined,  in  whatever  form, 
by  a  competent  tribunal,  it  is  not  open  to  inquiry  in  any 
other  proceeding  between  the  same  parties.  A  judgment 
at  law  is  conclusive  in  equity  upon  the  same  subject  between 
the  same  parties.  And  where  the  legality  of  the  expulsion  of 
a  member  is  once  judicially  determined  in  a  legal  or  equitable 
controversy  between  the  parties,  in  which  an  issue  involving 
the  question  has  been  distinctly  raised,  the  door  to  further 
inquiry  upon  that  subject  is  forever  closed. 

§  85.  Injunction  to  restrain  illegal  expulsion, 
etc.  Courts  of  chancery  have  jurisdiction  in  a  great  variety 
of  cases  to  enjoin  parties  from  proceeding  in  courts  of  law. 

Their  jurisdiction  extends  as  well  to  proceedings  in  the  high- 
est as  in  the  lowest  and  most  limited  tribunals;  and  courts  of 
one  state  may  enjoin  parties  from  proceeding  in  the  courts  of 
other  states. 

'  Bachman  v.  Arbeiter  Bund,   64 
How.  Pr.  (N.  Y.),  442. 


•ClIAl'.  3,  §86.]  MEMBERSHIP.  105 

But  injunctions  issue  against  parties,  and  not  against  courts; 
and  the  jurisdiction  in  this  respect  has  legal  limits  which 
apply  to  proceedings  in  all  courts  and  tribunals. 

The  proceedings  of  a  society  in  expelling  members  are  judi- 
cial in  their  character,  and,  in  such  proceedings,  the  society 
performs  the  functions  of  a  court  of  limited  and  special  juris- 
diction. A  court  of  chancery  has  no  more  power  over  the 
proceedings  of  a  court  of  special  and  limited  jurisdiction  than 
over  proceedings  of  courts  of  general  jurisdiction.  AVhere  the 
inferior  tribunal  has  jurisdiction  of  the  subject  matter,  a  bill 
in  equity  will  not  lie  to  correct  and  restrain  alleged  irregulari- 
ties in  the  pleadings  and  procedure  before  it;  nor  will  it  lie  to 
•enjoin  the  tribunal  from  a  judicial  determination  of  the  matter 
before  it,  in  order  that  the  court  may  inquire  into  the  alleged 
improper  constitution  of  the  tribunal. 

The  general  principle  is,  that  a  court  of  chancery  is  not  the 
proper  tribunal  to  correct  the  errors  and  irregularities  of  infer- 
ior tribunals,  and  that  in  ordinary  cases  the  court  may  not 
interfere,  i 

A  medical  society,  incorporated  under  a  charter  empowering 
it  to  expel  its  members,  summoned  the  plaintiffs,  who  were 
membsrs,  to  appear  before  a  board  of  trial  composed  of 
members,  to  answer  charges  preferred  by  a  committee,  that 
the  plaintiffs  had  violated  the  by-laws  of  the  society  by  con- 
duct unworthy  of  honorable  physicians  and  members  of  the 
society,  in  practicing  according  to  a  certain  exclusive  theory 
or  dogma,  and  that  plaintiffs  belonged  to  an  association  whose 
purpose  was  at  variance  with  the  principles  of  the  society. 

Plaintiffs,  thereupon,  filed  a  bill  in  equity  against  the 
society,  the  board  of  trial,  and  the  committee  preferring 
charges,  alleging  that  it  was  the  defendants'  intention  tc)  expel 
the  plaintiffs  only  and  solely  for  practicing  homoeopathy;  that 
the  body  to  try  them  was  wrongfully  constituted;  and  that 
the  proceedings  were  irregular  and  void.  The  Su]ireme  Court 
of  Massachusetts  held  that  the  court  had  no  jurisdiction  to  in- 
terfere by  injunction  with  the  proceedings  before  a  court  of 
limited  and  special  jurisdiction." 

^  86.  Injunction  to  reinstate  exi)elle(l  mem- 
ber.    There  are  several  cases  in  the  books,  in  Mhich  ex[)elled 

'Kerr  on   Injunctions,    c   3    and        '^Gre.trg  v.   Massachusetts  Medical 

cases  there  cited;  Movers  v.  8med-  Society'lll  Mass,  185;   See  Sturces 

ley,  6  Johns   Ch.   28;    Heywood    v.  v.  Board  of  Trade   of   Chicago,  86 

BufTalo,  4  Kern,  534.  111.441. 


106  MEMBERSHIP.  [ClIAP.  3,  §86. 

members  have  exhibited  bills  in  equity  against  their  societies 
complaining  of  their  illegal  expulsion,  and  praying  an  injunc- 
tion to  restrain  the  society  from  interfering  in  any  manner  in 
the  full  enjoyment  of  their  rights,  jU'ivileges  and  franchises  of 
membership. 

It  is  evident,  however,  that  in  these  cases  the  members  have 
mistaken  their  remedy. 

Injunction  is  a  preventive  remedy.  It  comes  between  the 
complainant  and  the  injury  he  fears  or  seeks  to  avoid.  If  the 
injury  be  already  done,  the  writ  can  have  no  operation,  for  it 
cannot  be  applied  correctively  so  as  to  remove  it.' 

Nor  will  such  a  bill  for  an  injunction  be  aided  by  an  allega- 
tion that  a  petition  for  mandamus  has  been  filed  in  a  court  of 
law,  praying  that  the  society  show  cause  why  a  writ  of  man- 
damus should  not  be  issued,  requiring  it  to  restore  the  com- 
plainant to  all  his  rights,  privileges  and  functions  of  member- 
ship. 

Resort  may  not  be  had  to  the  writ  of  injunction,  either 
directly  or  indirectly,  to  obtain  affirmative  relief. 

Where  a  party  is  excluded  from  membership  in  an  incor- 
porated soci'ety,  the  rightfulness  of  his  expulsion  must  be  tried 
at  law,  and,  until  his  rights  are  thus  settled,  a  court  of  equity 
will  not  interfere,  by  injunction,  to  restore  lum  to  his  position, 
even  though  he  may  suffer  a  loss  of  profits  which  he  might 
make  through  his  membership  before  the  action  at  law  can  be 
determined. 

An  injunction  should  not  be  awarded  in  doubtful  cases. 
Its  use  is  the  exercise  of  a  delicate  power,  which  should  not 
be  encouraged  by  coui-ts,  except  in  clear  and  well  defined  cases 
falling  within  principles  of  equity  jurisprudence,  sanctioned 
by  well  adjudicated  precedents.  The  injury  which  an  expelled 
member  of  a  board  of  trade  or  chamber  of  commerce  may 
suffer  in  the  loss  of  profits  which  he  might  make  by  reason  of 
the  privileges  of  membership,  cannot  be  regarded  as  sufficient 
to  justify  a  court  of  equity  to  interfere  by  injunction  and  place 
the  expelled  member  in  the  full  enjoyment  of  the  rights  and 
privileges  of  membership,  without  stopping  to  inquire  whether 
the  expulsion  was  legal  or  illegal.' 

The  plaintiff,  who  had  been  expelled  from  the  board  of 
trade  of  the  city  of  Chicago  by  the  board  of  directors  thereof, 

'Wangelin  v.  Goe,  50  111.  463;  Fisher  v.  Board  of  Trade,  80  111. 
Menard  v.  Hood,  68  111.  123.  85 ;  Baxter  v.  Board  of  Trade,  83- 

^Wangelin    v.    Goe,    50   111.  463;    111.  146. 


Chap.  3,  §S7.]  membership.  107 

brought  suit  in  equity  to  obtain  an  injunction  to  restrain  said 
.  board  from  interfering  with  his  access  into  the  hall  of  the 
association,  and  with  his  carrying  on  his  business  therein.  He 
alleged  that  two  of  the  directors  were  not  naturalized  citizens 
of  the  United  States;  that  two  of  them  were  prejudiced  and 
unfair;  that  some  did  not  hear  the  evidence,  but  read  it  after 
it  had  been  written  out;  that  the  prosecuting  wituess  was 
improperly  sworn  before  a  notary  public,  and  that  plaintiff 
was  not  guilty  of  the  charges  brought  against  him. 

The  court  held  that  such  a  proceeding  was  not  proper,  as  it 
was  an  attempt  to  attack  collaterally  the  judgment  of  expul- 
sion. ' 

It  was  held  in  Leech  v.  Harris,  2  Brewster  (Pa.)  571,  by  the 
judge  of  the  Court  of  Common  Pleas  for  Philadelphia,  that 
an  injunction  will  lie  to  restrain  a  contemplated  illegal  expul- 
sion. In  stating  the  grounds  of  this  decision,  the  court  says: 
"  Equity  prevents  mischief.  It  does  not  wait  until  it  is  con- 
summated. It  does  not  even  measure  the  paces  by  which  it 
advances.  It  meets  it  at  the  threshold,  and  seeks  to  j)revent 
a  meditated  wrong  more  often  than  to  redress  an  injury  already 
done.  Courts  of  equity  constantly  decline  to  lay  down  any 
rule  which  shall  limit  their  power  and  discretion  as  to  the  par- 
ticular cases  in  which  special  injunctions  shall  be  granted  or 
withheld";  citing  2  Story's  Equity  Jurisprudence,  §§  862, 
959,  b. 

§  87.  Decree  of  court  reinstatiiig'  member 
must  be  presented  to  society.  One  who  has  been 
expelled  from  membership  in  a  society,  but  who  has  been 
subsequently  reinstated  by  a  decree  of  court,  should  present 
the  decree  in  a  regular  manner,  serve  it  on  the  officers  of  the 
society,  and  demand  his  reinstatement  of  such  officers.  He 
may  not  assert  his  status  by  simply  appearing  at  the  next 
regular  meeting  after  the  decree  and  insisting  upon  his  rights, 
without  informing  the  officers,  in  a  regular  manner,  of  the 
action  of  the  court.  If,  while  so  appearing  and  insisting  ujion 
his  rights,  he  is  ejected  from  the  hall  in  which  the  meeting  is 
held,  he  cannot  recover  damages  at  law.  * 

§  88.      Subordinate    society    refusing:  to    obey 

order  of  superior  body.     In  an  action  by  a  benevolent 
society  against  a  member  for  money  loaned,  the  defense  was 

'  Pitcher  v.  Board  of  Trade,  111 ;  13  -  IklcLaffertv  et  al  v.  Sweeney,  Pa. ; 
N.  E.  Rep.  187.  9  Atl.  Rep.  277. 


108  MEMBERSHIP.  [ClIAP.  3,  §89. 

that  the  defendant  had  been  wrongfully  deprived  of  member- 
ship in  the  lodge,  and  money  privileges  thereto  appertaining, 
exceeding  plaintiff's  claim,  and  that,  npon  defendant's  appeal 
from  such  expulsion  to  the  grand  lodge,  according  to  the 
society's  rules,  his  reinstatement  was  ordered,  which  order  the 
local  lodge  refused  to  obey.  It  was  held  that  a  coilrt  of  equity 
would  refuse  to  aid  plaintiff  until  the  order  of  reinstatement 
was  obeyed,  according  to  the  society's  rules,  although  the 
grand  lodge  itself  had  no  mandatory  powers  to  enforce  its 
superior  authority ;  that  the  court  would  grand  relief  in  equity 
by  refusing  to  enforce  payment  of  the  claim  of  the  society 
against  such  member,  until  the  case  was  heard  on  its  merits,' 

§  89.    Records  of  proceeding's  in  expnlsion.     It 

is  a  maxim  of  the  law  that  "  a  corporation  speaks  by  its 
records." 

It  will  be  presumed  that  entries  made  in  the  minutes  of 
meetings  of  a  society,  have  been  made  by  the  proper  officer. 

The  records  which  every  corporation  is  supposed  and  bound 
to  keep,  must  show  upon  their  face  the  exact  cause  of  expul- 
sion, and  all  of  the  proceedings  necessary  to  authorize  action 
upon  its  part.  These  facts  should  be  determined  by  the  record 
itself  in  case  they  are  brought  in  question.^ 

"Where  the  laws  of  the  society  require  that  charges  preferred 
against  a  member  be  read  in  open  lodge,  that  a  copy  of  them 
be  furnished  to  him  under  the  seal  of  the  lodge,  and  that  he 
be  cited  to  appear  to  answer  them,  the  record  should  show 
that  these  requirements  were  f  ullilled ;  and  a  mere  record  of  a 
sentence  of  expulsion,  or  suspension,  without  any  record  of  the 
proceedings  to  found  this  sentence  upon,  is  a  nullity.^ 

While  it  may  possibly  be  permitted  to  contradict  the  records 
of  a  voluntary  society,  or  show  that  such  records  do  not  fully 
disclose  all  the  proceedings  of  the  body,  which  ought  to  be 
recorded,  yet  it  is  clear  that  proof  of  that  kind  must  be  so 
convincing  and  satisfactory  as  to  leave  no  doubt  but  that  the 
matter  attempted  to  be  interpolated  into  the  records  of  the 
proceedings  of  the  society  actually  occurred.  AY-liere  the 
records  of  each  meeting  are  read  at  each  succeeding  meeting, 
and  are  subject  to  correction  at  such  succeeding  meeting,  the 

'  Schmidt    v.    Abraham    Lincoln  ciety  v.  "Weatherly,  75  Ala.,  248. 

Lodge,  Ky.,  2  S.  W.  Rep.  156.  ^  Lazensky  v.  Supreme  Lodge,  31 

"^  Koehler  v.    Mechanics   Aid  So-  Fed.  Hep.  592. 
ciety,    22    Mich.  86;    Medical    So- 


Chap.  3,  §90.]  membership.      ,  109 

presumption  will  be  strong  in  favor  of  their  truth  and  exact- 
ness.' 

§  90.  It  is  evident  that  the  records  of  a  voluntary  society 
are  as  much  the  records  of  one  member  as  of  another,  and  that 
they  are  evidence  against  him.'^ 

Books  of  an  incorporated  society  are  evidence  in  disputes 
between  members  of  the  society,  but  they  are  not  evidence 
against  strano;ers.^ 

The  minutes  and  reports  in  writing  are  the  best  evidence  of 
what  took  place  in  meetings  of  the  tribunal  which  expelled  a 
member,  for  upon  them  the  resolution  of  expulsion  is  based. 
In  an  action  by  a  member  of  a  society,  who  has  been  expelled, 
to  have  the  resolution  of  expulsion  adjudged  null  and  void,  a 
member  of  that  tribunal  may  not,  as  a  witness,  make  any 
statement  as  to  what  particular  conduct,  on  the  part  of  the  ex- 
pelled member,  was  deemed  by  the  tribunal  improper  and 
prejudicial.  Such  a  statement  would  be  his  opinion  merely. 
What  is  wanted,  in  such  an  action,  are  the  facts,  not  the  con- 
clusions or  judgment  of  the  witness.  It  would  clearly  not  be 
permitted  to  the  witness  to  place  his  interpretation  upon,  or 
give  his  opinion  of,  the  proceedings  and  actions  of  the  tribunal 
which  are  evidenced  by  sncli  minutes  and  reports.  Nor  may 
such  a  witness  be  asked  to  state  what  conduct  on  the  part  of 
the  expelled  member,  he,  as  a  member  of  the  tribunal, 
deemed  to  be  improper  and  prejudicial  to  the  society.  When 
the  witness  voted  upon  the  resolution  of  expulsion,  he  per- 
formed a  judicial  act,  and  he  may  no  more  be  asked  to  state 
the  particular  ground  upon  which  he  based  his  judgment  than 
a  judge,  a  juror  or  arbitrator  could,  after  judgment,  be  ques- 
tioned as  to  the  reason  or  basis  of  his  determination. 

Inquiry  into  what  was  said  by  members  of  the  tribunal, 
during  the  investigation,  about  the  charges  and  the  guilt  of 
the  accused  member,  would  violate  the  sanctity  of  such  pro- 
ceedings, and  weaken  their  efficiency.  Such  inquiry  is  clearly 
opposed  to  the  policy  out  of  which  such  investigations  origi- 
nate, and  by  which  they  are  to  be  conducted.  Such  investi- 
gations are  in  their  nature  judicial.  If  the  conduct  and  action 
of  the  members  of  the  tribunal,  in  the  discussion  and  decision 
of  questions  before  it,  are  to  be  the  subject  of  public  discussion 

'  Hawkshaw  v.  Supreme  Lodge,  ^  Commonwealth  v.  Woelper  et 
29  Fed.  Rep.  770.  al.  3  Sar.  and  R.  (Pa.)  28. 

"  Diehl  V.  Adams  County  Mutual, 
58  Pa.  St.,  443. 


110  MEMBERSHIP.  [ClIAP.  3,  §91. 

and  comment,  it  would  greatly  embarrass  them,  and  prove  to 
be  a  restraint  upon  a  free  debate  on  the  questions  involved. 
What  member  of  the  society  would  be  willing  to  serve  on  such 
a  tribunal,  if  his  remarks,  concerning  the  matters  for  dis- 
cussion and  decision,  could  be  made  public?  With  the  result 
of  the  discussion,  as  expressed  by  a  proper  and  sufficient  vote, 
the  parties  must  be  satisfied.' 

§  91.  Double  sentence  of  society.  A  society 
may,  in  proper  cases,  by  its  by-laws,  provide  for  the  imposi- 
tion of  a  fine,  suspension,  or  expulsion.  It  may  provide  for 
a  double  punishment,  as  for  fine  and  suspension.  But  it  is 
well  settled  that,  in  the  absence  of  direct  provisions,  the  power 
to  give  an  alternative  sentence  does  not  authorize  a  double 
one,  and  that  such  a  sentence  is  void. 

'  Loubat  V.  Leroy,  65   N.  Y.   138. 


CHAPTER    IV. 


Suits  By  or  Against  an  Unincorporated  Society. 


Sec.  92.  Proper  parties  to  actions. 

Sec.  93.  As  to  actions  by  a  society,  or  a  member,  for  recovery  of  its 

property. 

Sec  94.  As  to  actions  by  a  particular  officer  of  a  society. 

Sec.  95.  Suits  on  behalf  of  members  as  such. 

Sec  96.  Injunction  restraining  libel  on  society. 

Sec  97.  Judgment  against  unincorporated  society. 

Sec.  92.  Proper  parties  to  actions.  The  old  rule 
was  that,  in  suits  by  or  against  an  unincorporated  voluntary 
society, — whatever  the  number  of  its  members,  or  the  nature 
or  extent  of  the  object  undertaken — the  society  was  looked 
upon  as  in  the  nature  of  a  partnership,  and  all  the  members 
were  necessary  parties.  But  by  statute,  both  in  this  country 
and  in  England,  this  rule  has  been  modified  to  suit  the  exigen- 
cies of  modern  practice. 

It  would  serve  no  useful  purpose  to  recite  in  this  treatise 
the  exact  changes  which  each  state  has  made  in  the  old  rule, 
and  it  is  only  necessary  here  to  state  the  modern  general  rule, 
— sometimes  called  the  equity  rule.  If  the  members  of  the 
society  are  so  numerous  that  they  cannot  be  made  parties  to 
the  cause,  with  any  chance  of  bringing  it  to  a  hearing,  in 
consequence  of  abatements  and  like  difficulties,  then  suit  ma}^ 
be  brought  in  the  name  of  one  or  more  for  the  use  of  all — 
or,  two  or  three  members  may  be  made  defendants  to  rejire- 
sent  the  interests  of  all.  If  there  should  be  two  or  more 
classes  of  members,  who  have  separate  or  conflicting  interests, 
then  a  small  number  may  be  selected  from  each  class  to 
represent  that  interest,  in  the  same  way  as  if  the  whole  class 
had  been  brought  before  the  court. 

It  sometimes  happens  that  there  is  a  class  of  members  of  a 
society  who  have  conflicting  interest  with  the  others;  then 
the  plaintiffs,  if  the  class  to  which  they  belong  is  very 
numerous,  put  forward  two  or  three  of  their  number,  who  sue 
on  behalf  of  themselves  and  all  the  others  of  that  class,  and 

(111) 


112  SUITS.  [Chap.  4,  §92. 

make  the  otiier  members  defendants,  who  have  conflicting 
interests;  or,  if  the  defendants  are  numerous,  make  some  of 
them  defendants  on  behalf  of  the  rest.' 

A  statute  provided  that  "•  when  the  question  is  one  of  a 
general  or  common  interest  of  many  persons,  or  where  the 
parties  are  very  numerous  and  it  may  be  impracticable  to  bring 
them  all  before  the  court,  one  or  more  may  sue  or  defend  for 
the  whole."  Plaintiffs  sued  "on  behalf  of  themselves  and  the 
other  stockholders  of  the  association,  who  may  come  in  and 
contribute  to  the  expense  of  the  suit."  The  court  held  that 
the  complaint  showed  a  compliance  with  the  statute  and  said: 
"•  If  the  plaintiffs  could  have  required  from  all  other  parties 
interested  who  may  come  in  and  avail  themselves  of  the  bene- 
lit  of  the  action,  to  contribute  to  the  expense,  stating  this 
condition  in  the  complaint  cannot  affect  their  rights  in  this 
particular,  or  prevent  them  from  prosecuting  the  action.  The 
liability  to  share  the  expense  was  the  practice  in  the  court  of 
chancery;  it  has  not  been  abolished,  or  in  anyway  affected  by 
the  recent  legislative  changes  in  our  practice.  *  *  *  One 
or  more  parties,  therefore,  of  a  numerous  class,  have  a  right 
to  state  that  they  sue  for  the  benefit  of  the  whole,  or  of  those 
interested,  who  may  come  in  and  contribute  to  the 
expense."' 

Where  one  party  brings  a  suit,  under  such  a  statute,  for  the 
benefit  of  many  having  a  common  interest,  but  too  numerous 
to  be  brought  before  the  court,  it  is  sufficient  if  they  are 
described  with  as  much  certainty  as  the  nature  of  the  contro- 
versy will  admit.^ 

To  enable  a  member  to  bring  a  suit  in  his  own  right,  and  on 
behalf  of  others  having  a  common  interest,  it  is  not  sufficient 
to  allege  that  the  other  parties  are  so  numerous  that  it  would 
be  impracticable  to  bring  them  all  before  the  court,  but  the 
nature  of  their  common  interest  must  appear  to  be  such  as 
would  entitle  them,  were  they  all  before  the  court,  to  maintain 
the  action  in  their  own  right,  or  in  their  own  names.^ 

In  an  action  against  an  unincorporated  society,  except  when 
the  statute  permits  it  to  be  sued  in  the  name  adopted  by  it, 
the  members  are  the  proper  parties;  but  where  the  trustees 

'Bromley  v.  Williams,  33   Beav.,  ^Sourse  v.  Marshall,  23  Ind.,  194. 

1 77.  1  Daniell's  Ch.  Pr.,  27.  '  Habicht  v.   Pembertou,   4   San- 

'Dennis  v.  Keunedv,  19   Barb.  N.  ford's  (N.Y.Superior  Ct),   Repts.,.. 

Y.,  517;    Stadler  v.   District  Grand  657. 
Lodge,  3  Am.  L.,  Rec.  589. 


CiiAP.  4,  ^93.J  SUITS.  113 

only  are  sued,  if  they  are  members,  the  defect  is  one  of  parties 
only,  is  waived  if  not  objected  to,  and  the  trustees  will,  after 
indgment,  be  presumed  to  have  been  members.' 

§  93.  As  to  actions  by  a  society  or  a  member 
for  recovery  of  its  property.  A  member  of  an  un- 
incorporated society  cannot  maintain,  in  his  name,  for  the 
benefit  of  the  society,  an  action  on  a  note  given  to  or  held  by 
the  society,  without  showing  by  his  complaint  or  declaration 
that  he  is  the  general  agent  of  the  society,  or  that  he  is 
specially  authorized  to  bring  the  suit  for,  and  on  behalf  of  the 
society,  and  without  further  showing  that,  under  the  contract 
and  agreement  by  which  the  members  are  formed  into  and 
united  as  a  society,  the  members  themselves  have  a  legal  title 
to  maintain  the  suit.  The  right  to  maintain  the  action  must 
be  shown  to  be  in  both  the  members  at  large  and  the  member 
suing.  Although  the  complaint  or  declaration  avers  that  the 
society  is  unincorporated,  it  by  no  means  follows  that  its  indi- 
vidual members  have,  therefore,  a  right  to  maintain  an  action 
in  their  own  names,  and  for  their  own  benefit,  upon  every 
security  given  to  the  society,  or  to  third  persons  for  account 
of  the  society.  Their  right  to  do  so  must  depend  upon  the 
nature  of  the  association,  and  the  terms  and  conditions  of  the 
aOTeement  bv  which  its  members  are  united. 

Although  the  society  is  not  incorporated,  its  members  are 
not  necessarily  either  partners  or  joint  owners. 

They  may  have  only  an  equitable,  and  that  only  an  eventual 
and  contingent  interest  in  the  property  and  funds  of  the  society', 
and  to  permit  them  to  appropriate  these  to  their  own  imme- 
diate use,  by  a  recovery  in  their  own  names,  or  by  one  on 
behalf  of  others,  might  be  to  aid  them  in  deceiving  the  public, 
and  defrauding  creditors. 

These  observations  show  not  only  the  propriety,  but  the  neces- 
sity, of  requiring  that  the  contract  or  agreement  by  which  the 
members  are  formed  into  and  united  as  a  society,  shall  be  set 
forth,  as  the  only  means  of  enabling  the  court  to  determine 
whether  they  have  a  legal  title  to  maintain  the  suit;  and 
whether  a  member  suino;  on  behalf  of  the  society  has  such  an 
authority  as  can  enable  him  to  bring  suit  in  his  own  name  for 
its  property,  is  a  question  of  law,  which  can  only  be  deter- 
mined when  the  whole  nature  and  terms  of  his  authority  shall 
be  set  forth.* 

'  Matoon  V.  Wentworth,  4  Cin.  L.  "  Habicht  v.  Pemberton,  4  Sand- 
Bull.,  513.  ford's  (N.   Y.   Superior  Ct.)   Reiits. 

657. 


114  SUITS.  [Chap.  4,  §95. 

§  94.  As  to  actions  by  a  particular  officer  of 
an  association.  Where  a  written  promise  to  pay  money 
is  made  to  "  the  treasurer  of  "  an  unincorporated  society,  no 
action  can  be  maintained  by  the  treasurer  against  the  prom- 
isor. 

"To  maintain  that  (the  treasurer)  has  a  right  to  tlie  action, 
would  be  to  put  him  upon  the  same  ground  he  would  occupy, 
if  the  association  had  been  incorporated,  and  made  capable  by 
its  charter,  of  suing  in  the  name  of  whoever  might  be  the 
treasurer  of  the  club,  upon  instruments  made  payable  to  the 
treasurer.  Such  a  capacity  to  maintain  an  action  can  be  con- 
ferred by  a  charter  only." 

In  such  a  case,  the  members  of  the  society  are  the  proper 
parties  to  bring  suit.' 

§95.     Suits  on  behalf  of  members,  as  such.     In 

the  absence  of  statutory  regulation  permitting  an  unincorpor- 
ated society  to  sue  or  be  sued  in  the  name  by  which  it  is  com- 
monly designated,  the  members  must  sue  or  be  sued  as  part- 
ners, or  persons  jointly  interested.  The  court  will  not  permit 
them  to  sue  or  be  sued  in  the  character  of  a  society,  nor  will 
courts  of  equity,  lend  their  aid  to  petitioners  coming  before 
them  in  such  a  character.  It  is  the  exclusive  prerogative  of 
o-'overnment  to  create  corporations,  and  to  invest  them  with 
power  to  sue,  as  such,  by  their  corporate  name;  and  upon  prin- 
ciples of  policy,  the  courts  of  the  country  do  not  sit  to  deter- 
mine upon  charters  granted  by  persons,  who  have  not  the  pre- 
rogative to  grant  charters.*' 

In  Lloyd  v.  Loaring,  6  Vesey  Jr.  TT3,  Lloyd  and  two  other 
persons,  "  on  behalf  of  themselves  and  all  other  members  of 
the  Caledonian  Lodge  of  Free  Masons,  except  the  defendant, 
Loaring,"  brought  their  bill  to  obtain  certain  chattels  belong- 
ino-  to  the  lodge.  On  demurrer  to  the  bill  for  want  of  parties, 
Lord  Eldon  declined  to  hear  argument  in  support  of  the 
demurr-er,  and,  in  allowing  it,  in  the  course  of  liis  opinion, 
said:  "How  is  this  court  to  take  notice  of  these  persons  as  a 
society?  A  bill  might  be  tiled  for  a  chattel,  the  plaintiffs 
stating  themselves  to  be  jointly  interested  with  several  other 
persons,  but  it  would  be  very   dangerous  to    take   notice   of 

'  Ewing    V.    Medlock,    5     Porter        "■  Story's  Eq.  PI.  at  section  407. 
(Ala)  82T  Pitltrott  V.   Thompson,   3 
Bos.  and  Puli/"Repts.  146. 


Chap.  4,  §97.]  suits.  115 

them  as  a  society,  havin^  anytliing  of  constitution  in  it.  *  * 
*  It  is  the  absohite  duty  of  courts  of  justice,  not  to  permit 
persons  not  incorporated  to  effect  to  treat  themselves  as  incor- 
porated on  the  record.  *  *  *  *  I  desire  my  ground  to  be 
understood  distinctly.  I  do  not  tliink  the  court'ought  to  per- 
mit persons  who  can  only  sue  as  partners,  to  sue  in  a  corporate 
character,  and  that  is  the  effect  of  this  bill."  ' 

Where  a  suit  in  chancery  was  brought  in  the  names  of 
"Jonah  Pipe  and  William  H,  Humphreys,  who  sue  in  behalf 
of  themselves,  and  many  other  persons  too  numerous  to  bring 
before  the  court,  constituting  the  members  of  the  British 
Emigrant  Mutual  Aid  Society,"  it  was  held  that  the  petition- 
ers were  not  entitled  to  relief  in  the  character  in  which  they 
sued;  that  a  mere  voluntary  society,  without  franchises,  could 
not  sue  in  the  character  of  a  society  possessing  corporate 
rights,  and  that  the  bill  must  be  dismissed  for  want  of  proper 
parties.'' 

§  96.    Injunction  restraining   libel  on  society. 

An  injunction  will  be  granted  upon  an  interlocutory  applica- 
tion to  restrain  the  publication  of  matter  tending  to  injure  a 
friendly  society. 

An  honorary  member  of  a  friendly  society  having  for  its 
object  the  assurance  of  sums  of  money  to  defray  the  expenses 
of  the  funeral  of  deceased  members,  etc.,  issued  a  circular 
amongst  the  clergymen  of  the  parishes,  in  wliicli  the  society 
had  district  lodges,  stating  in  the  circular,  matters  which  were 
false  at  the  time  of  framing  and  issuing  the  circular,  and  were 
calculated  to  injure  the  business  interests  of  the  society. 
Upon  motion,  in  an  action  by  the  trustees  of  the  society 
against  the  honorary  member,  an  injunction  was  granted 
restraining  the  issue  of  the  circular  until  the  trial  of  the 
action.^ 

§  97.  Judgment  against  unincorporated  society. 

Where  a  society  is  ])roceeded  against  by  7nii)id(nmcs,  or  kindred 
action,  by  a  name  not  inappro})riate  as  a  corporate  designation, 
and  the  ap])lication  is  resisted  by  it    in    that   name,    and    no 

'  Sep   Cullen   v.     The     Duke    of  -  Pipe  v.  Butemau   et  al.   1   Iowa 

Queoiisbiirv.    1    Brown's    Chancerv  309. 

Cases  101;  Pearce  V.  Pijier,  17  Vesey  ^  jlill  v.  Hart-Davis,  .47  L.  T.   R. 

1 ;  Coclvburii  v.  Thompson.  16  Vesev  N.  S.  82. 
321 ;  Beaumont  v.  Meredith,  2  Ves& 
Beames  180. 


116  SUITS.  [Chap.  4,  §97, 

denial  of  its  corporate  cliaracter  is  contained  in  the  papers,  it 
will  be  presumed  that  it  is  in  fact  a  corporation.' 

But  if  the  societ}'  is  in  fact  an  unincorporated  society,  in 
the  absence  of  statutory  regulation,  a  judgment  against  it  will 
be  null  and  void.  Such  a  jud*gment  is  not  a  recovery  against 
any  person,  either  natural  or  artificial.  The  sale  on  execution 
on  such  a  judgment,  of  property  held  in  the  name  of  the 
society,  would  be  a  nullity. 

Where  suit  is  brought  against  a  member  of  an  unincorpor- 
ated society,  he  may  not  plead  former  recovery  in  an  action 
against  the  society,  under  the  name  by  which  it  is  commonly 
designated.  The  society,  having  no  legal  existence,  could  not 
represent  its  members  in  a  suit  against  it,  and,  as  the  member 
was  not  a  party  to  the  proceeding,  such  a  plea  would  constitute- 
no  defense." 

^  Doyle  V.   Benevolent   Society,  3  bury,  34  111.  459;  Stoddard  v.  Onon- 

Hun  (N.  Y.)  361 ;  Barbaro  v.  Occi-  dago  Conference,   13  Barb.   (N.  Y.> 

dental  Grove,  4  Mo.  App.  429 ;  Uni-  570. 

ted  States  Express  Company  v.  Bed-  =Ash  v.  Guie,  97  Pa.  St.  493. 


CHAPTER    V. 


Liability  of  Members. 


Sec.    98.  For  debts  of  incorporated  society. 

Sec.    99.  Where  attempted  incorporation  is  invalid. 

Sec   104  \  ^^^  debts  of  unincorporated  society. 

Sec    106   ('  Liability  of  persons  incurring  the  debt. 

Sec  107.    Where  debt  is  incurred,  payable   out  of  the  funds  of  the 

society. 
Sec  108.    Notice  to  creditors  of  withdrawal  from  the  society. 
Sec  109.    Actions  for  libel  and  slander,  privileged  communications. 

Sec.  110.  (.Privileged  communications. 
Sec  111.  )  ° 

Sec    113  factions  between  members. 

Sec  114.    Liability  of  members  in  Pennsylvania. 

Sec  115.    Liability  of  members  suspended  by  statute  in  New  York. 

Sec.  98.  For  debts  of  incorporated  society.  Where 
a  society  is  incorporated  under  the  laws  of  a  state,  the  liability 
of  its  members,  for  tlie  debts  of  the  society,  is  governed  by  the 
provisions  of  the  act  under  which  it  is  duly  incorporated.  But 
if  the  organic  law  of  the  society  makes  no  mention  of  such  lia- 
bility on  the  part  of  its  members,  then  such  liability  is  governed 
by  the  general  laws  of  the  state  upon  the  subject  of  corpor- 
ations. 

The  trustees  of  an  incorporated  mutual  benefit  society  are 
not  personally  liable  for  the  debts  of  the  corporation,  unless 
they  have  in  some  way  specially  rendered  themselves  liable 
therefor.' 

It  is  well  settled  that,  where  an  association  which  has  ex- 
isted as  a  mere  copartnership,  becomes  incorporated,  and  the 
corporation  then  accepts  an  assignment  of  all  the  property  of 
such  association,  for  the  ])urpose  of  carrying  out  their  ol)joct,  the 
members  are  primarily,  and  jointly  and  severally  liable  for  all  the 
debts  incurred  before  the  act  of  incorporation.     In  such  a  case, 

•Wolf  V.  Schleiffer,  2   Brewster 
(Pa  J   5G3. 

(117) 


118  LIABILITY    OF   MEMBERS.  [ChAP.  5,  §98.. 

the  responsibility  of  tlie  corporation  for  debts  previously  made 
with  tlie  association,  does  not  become  substituted  so  as  to 
exempt  the  members  from  individual  liability.  And  it  does 
not  change  the  case,  that  the  members  of  the  company  had  it 
in  view  to  procure  a  future  act  of  incorporation,  when  it  was 
first  formed.! 

A  man  belonged  to  an  incorporated  mutual  aid  society  to- 
which  he  paid  certain  moneys.  These  moneys,  according  to 
the  scheme  of  the  societ}^,  were  to  be  paid  out  again  to  the 
various  members.  Thinking  that  he  had  received  no  consider- 
ation for  these  payments,  he  afterwards  brought  an  action  as 
for  money  had  and  received,  and  sued  two  of  the  members 
jointly  with  the  society.  The  declaration  set  out  various  fraud- 
ulent representations  whereby  plaintiff  was  induced  to  make 
the  contract,  but  its  only  ground  of  action  was  the  legal  in- 
validity of  the  company's  promise,  the  asserted  want  of  cor- 
porate power  to  make  the  contract  of  membership  according 
to  such  scheme.  The  court  below  held  he  had  no  cause  of 
action,  because  the  contract  on  its  face,  and  the  evidence  which 
he  put  in,  so  far  identified  the  plaintiff  with  the  scheme  as  to- 
prevent  him  from  then  complaining  of  it,  as  any  worse  than 
he  had  reason  to  believe  it.  The  supreme  court  says:  "He 
has  joined  two  separate  individuals  with  the  company  as 
having  received  money  to  his  use.  As  the  ground  of  action  is 
based  on  the  company's  reception  of  money  without  consider- 
ation, and  as  by  the  terms  of  his  contract  all  money  was  to  be- 
paid  over  to  the  company  and  distributed  among  the  various 
subscribers,  there  is  no  joint  liability  asserted  or  made  out. 
Bidwell  and  French  (the  members  sued)  had  no  joint  functions 
as  receivers  of  mone}^,  and  most  of  it  was  not  paid  to  either. 
Whatever  either  or  both  may  have  done,  they  have  never  held 
money  jointly  with  the  company  or  with  each  other.  The 
action  is  entirely  misconceived.  It  is  also  apparent  from 
plaintiff's  showing  that  whatever  money  he  paid  over  was  ex- 
pected to  be  paid  out  to  other  persons  and  not  to  be  retained, 
and  it  is  not  obvious  how  this  particular  action  will  lie  for 
money  which  has  been  disposed  of  by  his  consent. 

We  need  not,  therefore,  consider  whether  he  is  cut  off  by 
his  own  fault  from  complaining  in  any  shape  for  the  wrong^ 
which  he  supposes  was  done  him.  He  cannot  recover  in  this 
particular  action.'" 

'  Angell  and  Ames  on  Corpora-        -  Murphy    v.    Bidwell,  et  al.    SS' 
tions    at    sections    592,     593,    594;    Mich.  487. 
Boyles  v.  McCoy,  37  Tenn.  (5  Sneed) 
602. 


ClIAr.  5,  §99.]  LIABILITY    OF    MEMBERS.  119 

§  99.  Where  attempted  incorporation  is  in- 
valid. Articles  of  incorporation  of  a  mutual  benefit  society- 
were  duly  executed  by  defendants,  and  duly  recorded  with 
the  register  of  deeds  and  secretary  of  state.  A  member  of  the 
society  paid  his  dues,  and  received  a  certificate  of  member- 
ship. He  received  bodily  injury  entitling  him,  as  such  meni- 
her,  to  pecuniary  benefit,  and  an  action  was  brought  against 
the  original  signers  of  the  articles  of  association  as  individual 
persons.  The  society  did  not  become  a  corporation  de  jure, 
not  having  complied  with  the  statute  so  as  to  become  an 
insurance  corporation  de  jure,  and  not  being  a  "  benevolent 
society  "  under  the  statute.  In  deciding  that  the  action  would 
not  lie  against  the  defendants  as  individual  persons,  the  court 
said:  "  But  notwithstanding  it  is  not  a  corporation  de  jure, 
we  think  it  must,  at  least,  as  between  its  members,  be  regarded 
as  a  corporation  de  facto.  It  is  manifest  that  the  understand- 
ing between  the  members,  and  the  basis  upon  which  certificates 
of  membership  were  issued,  was  that  the  association  was  a 
corporation  in  fact  as  it  was  in  form.  ' 

It  never  could  have  been  intended  or  expected  that  the 
members  of  the  association,  whether  original  founders — mem- 
bers, like  defendant,  or  those  who  should  become  members  by 
joining  at  any  time,  should  or  would  be  liable  as  individuals, 
either  jointly  or  severally,  to  any  particular  member  who 
should,  by  virtue  of  and  under  the  terms  of  his  membership, 
become  entitled  to  pecuniary  relief  or  benefit.  On  the  contrary, 
the  intention  and  real  contract  was  that  the  association,  as  a 
corporation  in  the  contemplation  of  the  parties,  i.  e.,  the  mem- 
bers, should  be  liable  and  the  association  onl}'.  In  such  a 
state  of  facts,  though  the  association  is  not  a  corporation  de 
jure,  and  perhaps  not  for  every  purpose  a  corporation  de  facto, 
it  is,  as  between  the  members  themselves,  to  be  treated  as  a 
corporation  de  facto,  for  that  is  the  way  in  which  the  contract 
of  the  parties  treats  it;  and  the  right  of  a  member  to  pecuni- 
ary benefit  from  the  association  by  virtue  of  his  menibershij), 
must  stand  upon  the  basis  that  it  is  a  corporation  de  facto. 
Being  presumed  to  know  the  significance  of  his  membership, 
its  rights  and  liabilities,  he  is  estopped  to  take  any  other  posi- 
tion. This  is  not  only  intrinsically  just  and  fair,  but  it  is  in 
accordance  with  the  princij^les  of  the  authorities.  ' 

'  Morawetz.  Priv.  Corp.  §  139.  v.  Ross,  4  Abb.  Doc.  5S9;  Aspinwall 

^  Citinir  Morawetz  Priv.  Corp  i^^.  v.  Sacchi,  57  N.  Y.  831 ;    SaiiirtT  v. 

131,  133,'^134,  137;   HulTalo  A;   A.  R.  I'ptoii.  91  U.  S.  5G;   Chubb  v.  Upton 

Co.  V.  Carv,  20  X.  Y.  75.  followcMl  in  95  U.  S.  CGo. 

57,  G4,  67  N.  Y.,  and  93  U.  ti;  White 


120  LIABILITY    OF    MEMBERS.  [ChAP.  5,  §100. 

It  is  important  to  bear  in  mind  that  no  fraud  is  alleged 
against  defendant;  and,  further,  that  this  is  a  case  in  which  a 
member  of  the  association  is  seeking  relief  by  virtue  of  his 
membership.  If  the  action  were  between  a  purported  or  ])re- 
tended  corporation,  which  was  wholly  unauthorized  and  invalid, 
and  a  stranger,  different  rules  and  principles  might,  in  some 
circumstances,  be  involved."  ' 

§  100.     For   debts   of   uiiiiicorporated  society. 

In  the  absence  of  statutory  regulations,  the  liability  of  the 
members  respectively  for  contracts  made  by  an  unincorpor- 
ated society,  or  its  committee  or  trustees,  depends  upon  the 
principles  of  the  law  of  agency.  In  determining  the  liability 
of  a  member  of  such  a  society,  the  question  is,  whether  the 
person  by  whose  act  the  obligation  was  contracted,  was  the 
authorized  ag^ent  in  doina:  so,  of  such  member.  The 
leading  case  in  England  is  Flemyng  v.  Hector,  2  Mees.  & 
W.,  172;  2  Gale,  ISO.  In  this  case  defendants  were  sued 
for  wines  supplied,  before  its  dissolution,  to  the  club  of  which 
they  were  members.  The  rules  of  the  club  provided  for  an 
entrance  fee  and  an  annual  subscription;  and  those  who 
failed  to  pay  the  subscription  ceased  to  be  members.  The 
rules  also  provided  that  a  committee  should  "  manage  the 
affairs  of  the  club,"  and  that  members  should  daily  discharge 
their  bills  due  the  club.  The  main  ground  upon  which  the 
decision  rested  was  that  the  plaintiff  could  not  recover  unless 
he  showed  that  the  contract  upon  which  he  sued  was  made 
by  a  person  authorized  to  contract  on  l)elialf  of  the  defendant. 
The  question  was,  as  Baron  Parke  observed,  whether  there 
was  sufficient  evidence  to  go  to  the  jury  to  satisfy  them  that 
the  person  who  actually  ordered  the  goods  M'as  the  authorized 
agent  of  the  defendant  in  makino-  the  contract. 

In  Todd  v.  Emly,  7  Mees  &  AY.,  427;  8  Mees  &  W.,  505, 
the  evidence  was  that  a  club  was  formed,  and  a  fund  subscribed 
which  was  to  be  administered  by  a  committee.  It  was 
held  that  the  committee  must  be  supposed  to  have  agreed  to 
do  that  which  the  subscri1)ers  to  the  club  had  power  them- 
selves to  do,  that  was,  to  administer  the  fund  so  far  as  it  went, 
and  not  to  deal  on  credit,  except  for  such  articles  as  it  might 

'  Foster  v.  Moulton,  35  Minn.  458;  posed  not  only  of  the  directors,  but 

29  N.  "W.  Rep.  155.   An  association,  of  the  subscribers  to   the   articles; 

which  does  business  under  an  unsuc-  Field  on   Corp.,   sections   178-179. 

cessful  attempt  to  incorporate,  is,  as  Coleman  v.  Coleman,  78  Ind.  344. 
to  third  persons,  a  partnership,  com- 


OhAP.  5,  §101.]  LIABILITY    OF    MEMBERS.  121 

be  immediately  necessary  for  them  to  have  dealt  for  on  credit. 
There  being  no  other  evidence  to  connect  the  transaction 
with  the  defendants  than  that  they  were  members  of  the 
general  bod}'  of  the  committee,  the  question  for  the  jury  was, 
not  whether  defendants,  by  their  course  of  dealing,  had  held 
themselves  out  as  personallj'  responsible  to  the  plaintiff,  but 
whether  they  had  individually  authorized  the  making  of  the 
<}ontract  in  the  ordering  of  the  wine.' 

In  the  application  of  these  principles  it  has  been  held  that 
a  general  rule,  vesting'  the  conduct  of  all  the  concerns  of  the 
club  in  a  committee,  does  not  authorize  the  committee  to 
raise  money  by  debentures,  or  otherwise  to  pledge  the  credit 
of  members.  In  re  St.  James  Club,  it  was  said:  "It  is  very 
clearly  settled  that  no  member  of  a  club  is  liable  to  creditors 
of  a  club,  except  so  far  as  by  contract  or  dealing  he  may  have 
made  himself  personally  liable;  and  this  is  mere  common 
sense,  for,  if  a  member  paying  his  annual  subscription  and 
paying  for  the  articles  which  he  orders  in  the  club,  was  also 
liable  to  pay  the  person  who  supplied  the  club  with  those 
articles,  who  would  belong  to  a  club?'"' 

Sundry  persons  raised  by  voluntary  subscription  among 
themselves  a  sum  of  money  to  erect  a  building  for  an  acad- 
emy, and  then  held  a  meeting,  at  which  they  chose  one  of  their 
number  an  agent  "  to  employ  workmen,  procure  materials," 
etc..  and  this  agent  hired  the  plaintiff  to  labor  in  the  erection 
of  the  building.  It  was  held  that  he  bound  all  the  subscribers, 
including  himself,  and  that  an  action  might  be  maintained 
against  all  the  subscribers  jointly.' 

§  101.  Same  subject  coiitiiuied.  All  the  members 
of  an  unincorporated  society  who  assent  to  an  undertaking 
whereby  a  debt  is  incurred,  or  who  subsequently  ratify  it,  are 
liable  for  the  payment  of  tlie  debt."  Subsequent  ratification 
is  equivalent  to  prior  anthorization  of  the  acts  of  an  agent. 
No  new  consideration  is  necessary  to  support  it.^ 

There  are,  doubtless,  cases  in  which  the  act  done  l)y  the  offi- 
cer or  committee  of  the  societ3%  is  so  clearly  in  furtherance  of 
the  objects  for  which  the  association  was  organized  that  all 
the  members  will  be  presumptively  bound  by  it.     Whether 

'See    4    Abbott's  New  Cases,    p.  ^Ash   v.    Guie,  97   Pa.    St.    493; 

300.  Ridnelv  v.  Dobson,  3  Watt's  &  Sar. 

-Jrt  re  St.  James  Club,  13  Eng.  L.  (Pa.)  fl8;   Lewis  v.  Tilton,  G4  Iowa 

^  Eq..  589 ;  16  Jur.,  1075.  220;  Kichmond  v.  Judy,  6  Mo.  App. 

^Robinson  v.  Robinson,  10  Maine,  465. 

240.  '  Ferris  v.  Thaw  et  al  72  Mo.  446. 


122  LIABILITY    OF    MEMBERS.  [ChAP.  5,  §101. 

the  liability  of  the  members  for  such  act  is  to  be  presumed, 
must  be  determined  by  the  court  from  an  inspection  of  the 
articles  of  association.  But  Avhen  such  is  not  the  case,  con- 
sent or  ratification  must  be  proved.  It  is  for  the  jury  to  say 
whether  the  debt  was  contracted  by  the  society  with  the  pre- 
vious concurrence  or  subsequent  approbation  of  the  defendant. 

So  far  as  the  evidence  of  agency  goes,  a  course  of  dealing 
may  amount  to  proof  of  original  authority.  The  fact  that  a 
member  of  a  society  recognized  as  correct  a  bill  against  the 
society  for  work  and  labor  done,  goes  to  show  that  he  knew 
that  the  work  was  being  ordered  in  the  name  of  the  society. 
Tlie  evidence  of  ratification,  even  though  doubtful,  and  sus- 
ceptible of  different  interpretations,  is  properly  submitted  to 
a  jury;  and  slight  circumstances  and  small  matters  are  some- 
times sufficient  to  raise  a  presumption  of  ratification.'  Where 
a  club  is  formed  for  the  purpose  of  buying  goods  at  whole- 
sale prices  out  of  paid-up  subscriptions,  in  order  to  enable 
members  to  obtain  the  beneht  of  the  lower  prices  of  such 
goods,  members  are  not  liable  for  goods  purchased  on  credit 
by  an  officer  not  authorized  to  contract  on  credit.'  But 
where  the  contract  of  association  and  the  agreed  basis  of 
making  such  purchases  show  that  the  officer  is  clothed 
with  a  discretion  to  contract  on  credit  for  the  benefit  of  the 
society,  the  members  are  liable  for  such  contracts  made  by  the 
officer.^ 

Under  a  by-law  of  a  society  giving  certain  powers  to  a 
standing  committee,  and  power  "generally  to  manage  the 
business  of  the  society,  expending  only  such  sums  of  money  as 
the  society  shall  place  at  their  disposal,"  the  committee  can- 
not bind  the  members  of  the  society  to  pay  debts  which  it 
may  contract,  unless  such  members  consent  to  or  approve  the 
incurring  of  such  debts.^ 

A  member  of  an  unincorporated  voluntary  society  is  not 
liable  for  a  debt  incurred  by  a  committee  of  the  society,  if  it 
does  not  appear  that  the  member  was  present  at  the  meeting 
appointing  the  committee,  and  there  is  no  evidence  of  the 
authority  of  the  committee  to  incur  the  debt,  or  of  the  obliga- 
tions and  duties  of  the  members  of  the  societv." 


'  Richmond  v.  Judy,  6   Mo.  App.        *  Child  v.   Christian  Society,  etc  ,. 
465.  Mass.  11  N.  E.  Rep.  664. 

2  Wood  V.  Finch,  2  F.  &  F.  447.  "  Volger  v.   Ray,   131  Mass.,  439. 

^  Cockerell  v.  Ancompte,  40  Eng. 
L.  &Eq.  284;  3  Jiir.  N.  S.  844. 


Chap.  5,  §102.]        liability  of  members.  123 

§  102.  Same  subject  continued.  If  an  officer  who 
has  been  authorized  by  the  members  of  an  unincorporated 
society  to  execute  a  promissory  note  for  a  debt  of  the  society, 
executes  it  in  his  own  name,  the  members  of  the  society  may 
be  sued  on  the  note,  whether  the  officer  discloses  his  agency 
or  not,  unless  it  is  clear  that  both  parties  to  the  note  intended 
that  the  officer  alone  should  be  liable.  Parol  evidence  is 
admissible  to  establish  the  intention  of  the  parties,  as  this 
evidence  does  not  contradict  that  which  is  written,  but  only 
serves  to  show  that  others  than  those  mentioned  on  the  face  of 
the  paper  are  bound  also,  since  the  act  of  the  agent  is  that  of 
his  principal.  The  liability  of  the  principal  depends  on  the 
act  done,  and  not  merely  on  the  form  in  which  such  act  finds 
expression." 

Where  certain  persons  are,  by  an  unincorporated  society, 
appointed  the  "  trustees  of  its  property  and  effects,"  they  are 
the  general  accents  of  the  members  for  the  management  and 
control  of  its  property  and  effects.  They  do  not,  as  a  matter 
of  law,  stand  in  the  relation  of  principals  to  other  agCEts 
appointed  by  the  society  to  perform  some  particular  duty  in 
respect  to  such  property,  nor  are  they  liable  for  an}'  debt 
incurred  for  its  improvement,  except  such  as  may  have  been 
made  at  their  request,  either  express  or  implied."^ 

There  is  no  legal  distinction  in  respect  to  liability  for  the 
debts  of  an  unincorporated  society,  between  an  officer  and  a 
mere  member,  where  neither  contracted  the  debt  or  authorized 
another  to  represent  him  in  the  transaction.^ 

It  is  not  necessary  that  the  agency  of  the  person  who  incurs 
the  debt  should  be  evidenced  by  any  minutes  of  the  meetings 
of  the  members  of  an  unincorporated  society.  There  is  no  ad- 
judication which  requires  such  a  verification  of  the  joint  acts 
of  the  members  or  a  part  of  such  members,  but  many  cases 
have  arisen  in  which  such  a  doctrine  might  have  been  held,  if 
it  had  been  the  law.  There  is,  undoubtedly,  much  conven- 
ience in  the  making  and  preservation  of  minutes  of  proceed- 
ings in  such  societies,  but  the  acts  of  the  members  may  be 
shown  in  the  delegation  or  ratification  of  power  to  a  third 
person  to  incur  debts  on  their  behalf.  The  subsequent  acts  of 
members  in  the  ratification  of  the  acts  of  a  third  person  in 
incurring  debts  on  behalf  of  the  society,  may  be  shown  to  bind 
him. 

'  Ferris    v.   Tliaw,   72    Mo-,  446;        =*  Central   Citv,  etc.     v.    Walker, 

Story  on  Air<-ncv,  i^?;  160,  270;  Burls  60     (N.  Y.)    424;  Wolf  et  ul-,    v. 

V.  Smith,  7  Bin^',  705.  Schleiller,  2  Brewster  (Pa.),  56:5. 

^  Devoss  V.  Gniy,  22  Ohio  St.,  159, 


124  LIABILITY    OF   MEMBERS.  [ChAP.  5,  §103. 

In  an  action  against  the  members  of  an  unincorporated  society 
for  work  and  material  furnislied  in  fittinoj  up  the  room  in 
whicli  the  societj'  held  its  meetings,  parol  evidence  that  the  de- 
fendants, at  one  of  the  meetings,  passed  a  vote  authorizing  one 
of  the  members  to  procure  the  work  and  inaterials,  which  he 
afterwards  ordered  of  plaintiff,  is  competent  to  show  that  the 
other  defendants  were  jointly  liable  with  him;  and  the  fact 
that  one  of  the  defendants,  who  acted  as  clerk  of  the  meeting 
at  which  such  vote  was  passed,  had  since  destroyed  the  infor- 
mal minutes  which  he  had  taken  for  the  purpose  of  preparing 
a  record,  does  not  preclude  the  plaintiff  from  showing  that 
such  a  vote  was  ])assed,  and  that  defendants  participated  in  it 
or  assented  to  it.' 

In  Lindley  on  Partnership  vol.  1,  p.  57,  it  is  said.  "No 
partnership  or  quasi -partnership  subsists  between  persons  who 
do  not  share  either  profit  or  loss,  and  who  do  not  hold  them- 
selves out  as  partners.  Societies  and  clubs,  the  object  of  which 
is  not  to  share  profits,  are  not  partnerships,  nor  are  their  mem- 
bers as  such  liable  for  each  other's  acts.  *  *  *  *  It  is  a  mere 
abuse  of  words  to  call  such  associations  partnerships,  and  if 
liabilities  are  to  be  fastened  on  any  of  their  members,  it  must 
be  by  reason  of  the  acts  of  those  members  themselves,  or  by 
reason  of  the  acts  of  their  agents;  and  the  agency  must  be 
inade  out  by  the  person  who  relies  on  it,  for  none  is  implied 
by  the  mere  fact  of  association. "-' 

"Upon  the  ground  that  there  is  neither  community  of  pro- 
fit nor  community  of  loss,  it  has  been  held  that  no  partnership 
subsists  between  the  members  of  a  mutual  insurance  society, 
in  which  each,  in  consideration  of  a  payment  made  to  him, 
underwrites  a  policy  for  a  stipulated  sum."^ 

In  such  societies,  each  member  acts  for  himself  only. 

§  103.  Same  subject  continued.  There  is  a  rule 
of  law  which  requires  that  all  persons,  to  whom  a  trust  is  com- 
mitted, must  confer  and  act  together,  but  this  rule  does 
not  apply  to  agents  appointed  to  perform  ministerial 
duties. 

"Where  the  members  of  a  society  appoint  a  committee  of 
two  or  more  members  to  purchase  property  for  the  benefit  of 
the  society,  it  is  not  necessary  that  all  the  members  of    the 

>  Newell  V.  Borden,  128  Mass.  31.  304;  Redway  v.   Sweeting,   L.  R.' 2 

"See   Richmond  v.  Judy,  6   Mo.  Exch.  400;  Gray  v.  Pearson,  L.  R.  5 

App.  465.  C  P.  568;  Andrews  and  Alexander's 

2  See  Strong  v.   Harvey,  3   Bing.  case,  8  Eq.  176. 


Chap.  5,  §104.]        liability  of  members.  125 

committee  should  be  corporeally  present  when  the  purchase  is 
negotiated  and  made,  in  order  that  such  members  of  the 
society  shall  be  personally  liable  for  the  act.  The  duty  in 
such  case  is  strictly  ministerial;  and  ministerial  officers  mavr 
in  general,  depute  their  powers  to  one  another  or  to  a  third 
person.! 

§  104.  Same  subject  continued.  The  members  of 
an  unincorporated  society  are  not  liable  to  an  action  at  law  by 
the  father  of  a  deceased  member,  by  reason  of  a  provision  in 
their  constitution  that  "  in  case  of  the  death  of  a  brother, 
there  shall  be  allowed  from  the  lodge  a  sum  of  not  less  than 
thirty  dollars,  to  defray  the  expense  of  burial;  which  shall  be 
paid  over  without  delay  to  the  deceased  brother's  nearest  of  kin." 
The  court  says:  " The  constitution  and  by-laws  of  the  lodge, 
treating  them  as  articles  of  a  voluntary  association,  do  not 
amount  to  a  promise  to  each  member  by  all  the  rest,  to  pay 
him  anything.  The  stipulation  in  the  by-laws  is,  that,  on  the 
death  of  each  member,  there  shall  be  allowed  from  the  lodge 
a  sum  not  less  than  thirty  dollars,  to  defray  the  expense  of 
burial,  to  be  paid  without  delay  to  the  deceased's  nearest  of 
kin.  The  payment  is  for  that  purpose.  It  is,  if  any  promise  at 
all,  a  promise  by  each  member  to  contribute,  by  periodical  and 
other  payments,  toward  a  certain  fund,  for  all  the  purposes 
contemplated  by  the  association,  including  money  to  be  paid 
promptly  for  the  expenses  of  burial,  to  be  done  usually  before 
letters  testamentary,  in  case  of  a  will,  or  letters  of  administra- 
tion, in  case  of  intestacy,  can  be  regularly  issued.  In  ^other 
words,  the  promise  of  each  member  is  to  pay  money  to 
the  lodge;  and  the  lodge,  not  being  incorporated,  can  main- 
tain no  suit.  If  it  creates  any  right  which  can  be  recog- 
nized by  law,  it  is  an  equitable  right  only  to  a  share  in  a  com- 
mon fund,  raised  either  for  purposes  purely  charitable,  or  for 
their  joint  benefit,  and  can  only  be  enforced  in  equity.  And 
if  there  were  any  ground  for  such  equitable  relief,  as  in  case 
of  partners  in  a  joint  fund,  raised  for  a  special  purpose,  of 
which  we  give  no  intimation,  such  equitable  relief  could  be 
sought  only  by  a  member  or  his  legal  representative. 

But  supposing  this  stipulation  in  the  constitution  and  by- 
laws of  the  lodge,  to  amount  to  an  express  promise  to  pay 
thirty  dollars  upon  a  certain  contingency,  there  is  no  consid- 

1  Wells  V.  Gates,  18  Barb  (N.  Y.)    (N.  Y.)  178. 
554 ;  Downing  v.   Rugar,  21  Wend, 


126  LIABILITY    OF    MEMBERS.  [ChAP.  5,  §105. 

eration  for  sucli  jjromise  moving  from  the  plaintiff  to  the  de- 
fendant, or  from  any  person  acting  in  privity  with  him  or  act- 
ing for  his  use  or  benelit,  or  with  an  intent  and  purpose  to 
obtain  a  benefit  to  the  plaintiff..  There  is  no  ground  to  infer, 
from  the  facts  agreed,  that  the  son,  who  was  a  member  of  the 
lodge,  in  paying  his  contributions  thereto,  had  any  purpose  of 
obtaining  money  from  the  lodge,  in  case  of  his  death,  for  the 
use  of  his  father,  or  other  next  of  kin,  for  his  own  benefit;  to 
whomsoever  it  might  be  paid,  under  these  provisions  it  was  a 
naked  trust,  for  defraying  the  charges  of  his  burial.  It  is, 
therefore,  not  at  all  analogous  to  the  case  where  A  owes  B 
and  B  owes  C,  and  in  consideration  that  B  will  release  A,  he 
promises  to  pay  C.  Such  promise  is  valid,  and  C  may  sue  A 
upon  it.  The  reason  is,  that  although  the  consideration  for  A's 
promise  to  C  does  not  move  from  C,  it  moves  from  A  for  C's 
use  and  benefit."' 

In  Barry  v.  Nuckolls,  21  Tenn.  (2  Hump.)  324,  the  proof 
showed  that  some  young  men  organized  a  society  for  acting 
plavs,  and  that  they  rented  a  house  for  that  purpose,  and 
ao-reed  to  pay  the  landlord  six  dollars  a  month  rent  for  ev^ery 
month  they  should  so  occupy  it.  Barry  became  a  member  of 
the  society  some  months  after  the  contract.  The  court  was 
requested  to  charge  the  jury,  that  if  the  contract  was  made 
before  Barry  became  a  member  of  the  society  he  was  not  bound 
by  it.  This  the  court  refused,  and  charged  that  in  such  a  case 
he  would  not  be  bound  for  the  previous,  but  would  be  for  the 
subsequent  rent,  and  the  jury  found  accordingly.  This  was 
erroneous  under  the  state  of  the  pleadings.  If  Barry  was  liable 
at  all  for  the  rent  after  he  became  a  member  of  the  society,  it 
was  not  upon  a  count  framed  upon  the  contract  originally 
made,  nor  upon  an  indehitatus  or  quantum  meruit  count  for 
work  and  labor  done,  but  upon  a  count  for  use  and  occupa- 
tion." 

§  105.    Liability  of  persons  incurring- the  debt. 

An  unincorporated  society  cannot  be  a  party  to  a  contract, 
nor  to  an  action  at  law.  The  persons  contracting  in  the  name 
of  such  an  organization  are  themselves  personally  liable,  either 
as  being  themselves  in  fact  principals,  or  as  holding  them- 
selves out  as  agents  for  a  principal  which  has  in  law  no 
existence.  They  are  liable  for  debts  contracted  by  them  in 
the  name  of  such  society  with  a  stranger,  in  the  absence  of 

'Payne  v.   Snow  et.  al.   12  Cush.        'See  Cohn  v.  Borst,  36   Hun   (N. 
(Mass.)  443.  Y.)  562. 


Chap.  5,  §106.]        liability  of  members.  127 

any  agreement  or  understanding  of  the  parties  to  the  con- 
tract, that  they  shall  not  be  personally  liable  for  such  debts.' 

It  is  a  general  principle  that,  although  a  party  may  be  a 
mere  agent,  and  known  to  be  such,  yet  if  he  contracts  in  his 
own  name,  or  in  his  name  as  agent,  when  his  principal  is 
incapable  of  contracting,  or  is  irresponsible,  the  law  presumes 
that  he  intended  to  bind  himself.^ 

The  justice  of  tuis  rule  rests  on  the  principle  that  otherwise 
the  party  performing  the  service  would  be  remediless.  If  the 
agent,  in  such  case,  would  stand  exonerated,  he  must  disclose 
a  responsible  principal,  or,  by  contract,  exempt  himself  from 
personal  liability. 

It  is  not  necessary  that  the  person  incurring  the  debt  for  the 
benefit  of  an  unincorporated  society  should  know  and  believe, 
at  the  time,  that  he  is  incurring  a  personal  liabilit}^  or 
indebtedness.  Nor  does  it  alter  the  question,  that  he,  at  the 
time,  contracted  as  an  officer  of  the  society.  His  liability 
springs  from  the  fact  that  he  had  no  principal^  no  legal  associa- 
tion or  body  which  he  could  represent,  act  for,  or  bind,  and  he 
must  be  held,  in  such  a  transaction,  at  least  as  ao-ainst  a 
stranger,  to  have  represented,  acted  for,  and  bound  only  him- 
self, in  the  same  manner  and  to  the  same  extent  as  if  there 
had  been  no  assumed  authority  to  act  for  such  society.^ 

Where  a  person  contracts  a  debt  for  such  a  society,  and  as 
an  officer  thereof,  the  termination  of  the  term  of  his  office 
does  not  relieve  him  from  liability.  Having  contracted  the 
debt,  he  is  bound  to  pay  it,  and  his  successor  ni  office  is  not  a 
successor  in  that  sense  that  renders  him  liable  on  the  contracts 
of  his  predecessor.'' 

§  106.  Same  subject  continued.  In  Cullen  v.  Duke 
of  Queensberry,  1  Brown,  Ch.  101,  it  was  held  that  where  the 
committee  of  a  voluntary  society  entered,  as  such,  into  a  con- 
tract for  business  to  be  done  on  behalf  of  the  society,  the 
funds  ]u-oving  insufficient,  all  the  acting  committee  were 
]iersonally  answerable,  on  the  ground  that  the  credit  must 
fairly  be  presumed  to  have  been  given  to  them  rather  than  to 
the  subscribers  at  large. 

Where  four  members  of  an  unincorporated  church  societv 
signed  a  call  to  a  pastor,  agreeing  to  pay  him  one  thousand 

'  Lewis  V.  Tilton,  64   Iowa,  220;  » F^.p(^le^J|J^.^l  ^    Taylor,    26   Wis., 

Heath    v.     Goslin,     80     Mo.,   310;  286;  Blakely  v.    Bemiecl<e    59  Mo' 

Doubleday  v.  Muskett,  7  Biiig.,  110;  198. 

Blakely   v.  Bennecke,  59   Mo..  193.  ■*  Sizer  v.  Daniels,  C6  Barb.  (N.  Y.) 

-  Story  oil  Agency,  gg  281,  282.  427. 


128  LIABILITY    OF    MEMBERS.  [ChAP.  5,  §107. 

dollars  per  year  for  his  services,  and  he  accepted  the  call,  and 
performed  the  services  as  pastor  of  the  church,  the  signers  of 
the  call  were  held  personally  liable  for  the  promised  salary.' 

A  committee  appointed  by  an  unincorporated  society  to  make 
arrangements  for  a  public  exhibition,  are  individually  liable 
for  work  necessary  for  the  occasion,  which  a  sub-committee  of 
their  number  procure  to  be  done,  although  in  making  the  con- 
tract the  sub-committee  assumed  to  act  as  othcers  of  the  asso- 
ciation.'^ 

Such  a  rule  is  salutary,  and  tends  to  the  promotion  of  jus- 
tice, by  preventing  the  procurement  of  services  from  too  in- 
cautious laborers,  and  of  goods  from  too  confiding  merchants, 
by  putting  forward  an  irresponsible  committee  to  act  for  an 
irresponsible  public  gathering. 

Where  a  person  expressly  permitted  his  name  to  be  used  as  a 
member  of  a  committee  of  arrangements  for  a  ball  to  be  given 
by  an  association,  and  subscribed  to  some  of  the  preliminary 
expenses,  but  took  no  further  part,  and  did  not  attend  the  ball, 
it  was  held  that  he  was  not  liable  for  the  cost  of  a  supper  pro- 
vided for  the  occasion  without  his  knowledge  or  consent.' 

In  an  action  against  a  person  who  has  incurred  a  debt  on 
behalf  of  the  society,  it  is  always  competent  for  him  to  show 
that  the  debt  was  contracted  on  the  credit  of  the  funds  of  the 
society,  and  not  on  a  footing  of  his  personal  liability.  If  the 
plaintiff,  by  his  contract,  has  trusted  solely  to  the  state  of  the 
funds,  and  this  has  been  shown,  the  member  acting  on  behalf 
of  the  society,  is  not  liable  unless  the  funds  have  been  col- 
lected. 

In  the  case  of  simple  contracts  where  the  party  has  looked 
to  the  anticipated  realization  of  funds  by  projectors  of  a  par- 
ticular undertaking,  and  not  to  the  personal  liability  of  the 
parties  with  whom  he  has  contracted,  his  claim  is  confined  to 
the  fund,  and  he  cannot  enforce  payment  from  individuals; 
and  if  the  project  miscarries,  and  funds  are  not  realized,  he 
has  no  claim  upon  anybody  or  for  anything," 

§  107.  Where  debt  is  incurred,  payable  out  of 
the  funds  of  the  society.  Where  a  contract  is  made  be- 
tween members  of  a  society  and  a  third  person,  by  which  the 

'  Thompson  v.  Garrison,  22  Kan.,  ^  Downing  v.  Mann,  3  E.  D.  Smith's 

766.  Rep.  (N.  Y.)  36. 

"  Fredendall  v.  Taylor,  23     Wis.  *  1  Addison  on  Contracts  p.  289  * 

540;    McCartee    v.      Chambers,    6  186  Abbott's  notes. 
Wend.  (N.  Y.)  649. 


Chap.  5,  §l08.]        liability  of  members.  129 

members  agree  to  pay  a  certain  sum  out  of  the  funds  of  the 
society,  when  they  shall  have  funds  applicable  to  his  demand, 
the  conditional  contract  becomes  absolute,  and  an  action  may 
be  maintained  against  the  members,  so  soon  as  they  receive 
such  funds  in  the  society.' 

When  an  association  consists  merely  of  subscribers  to  a  fund 
for  a  common  object,  and  is  not  a  partnership,  it  is  competent 
for  the  members  of  the  association  to  contract  expressly  on 
the  credit  of  such  fund;  and  to  limit  their  liability  to  the 
amount  of  such  fund,  which  may  be  applicable  to  the  particular 
debt.^ 

But  w^ien  an  association  which  is,  under  its  rules  and 
scheme,  a  partnership,  executes  a  note  containing  a  promise  to 
pay  "  out  of  their  joint  funds,  according  to  their  articles  of 
association,"  the  members  are  personally  liable  unless  it  appear 
unequivocally  plain  that  the  payee,  knowing  the  force  and 
effect  of  such  a  stipulation,  agreed  to  look  solely  to  the  part- 
nership fund  for  payment.' 

Partners  are  personally  liable  for  the  debts  of  the  partnei'- 
ship,  and  the  limitation  of  their  liability  is  viewed  with  dis- 
favor by  the  law,  both  on  account  of  the  opportunity  afforded 
by  such  limitation  for  fraud  upon  unsuspecting  persons,  and 
because  such  limitation  seeks  to  give  to  partnerships  the 
exemption  and  shield  of  corporations. 

§  108.  Notice  to  creditors  of  withdrawal  from 
the  society.  Where  a  body  of  men  associate  themselves  for 
social  intercourse  and  pleasure,  and  assume  a  name  under  which 
they  commence  to  incur  liabilities,  by  opening  an  account, 
they  become  jointly  liable  for  any  indebtedness  thus  incurred; 
and  if  either  of  them  wishes  to  avoid  his  personal  responsibil- 
it}^  by  withdrawal  from  the  body,  it  is  his  duty  to  notify  the 
creditors  of  such  withdrawal;  otherwise,  if  a  creditor  contin- 
ues to  furnish,  in  good  faith,  articles  such  as  have  l)een  previ- 
ously purchased  for  the  use  of  the  society,  his  resj^onsibility 
will  continue,  upon  the  same  yu-iiiciple  that  holds  retiring  ])art- 
ners  to  liabilities  for  an  indebtedness  subsequently  contracted 
with  former  creditors.  *  And  the  fact  that  a  member  moves 
away  from  the  town  or  city  in  which  the  society  meets  and  has 

'Hipirins  V.  Hopkins,  3  Exch.  163.        ••  Park  v.  Spaulding;  10  Ilun  128; 

-  Landman  v.  Entwistle,  7  Exch.  Tenney  et  al.  v.  N.  E.  Protection 
632.  Union,  37  Vt.  64. 

'Hess  et  al.   v.   Werts,  4   Sar.   & 
Rawle  (Pa.)  356. 

9 


130  LIABILITY   OF    MEMBERS.  [ChAP.  5,  §109. 

property,  is  not  of  itself  an  abandonment  of  membership  and 
a  notice  of  withdrawal.  ' 

In  Park  v.  Spaulding,  10  Hun  (JS".  Y.)  128,  defendant  was 
a  member  of  the  club  at  the  time  the  account  was  first  o])ened 
with  the  plaintiffs.  He  w^as  one  of  the  committee  who  made 
the  first  purchase  of  the  plaintiffs,  and  he  never  notified 
plaintiffs  at  any  time  of  his  withdrawal  from  the  club.  The 
o-oods  thus  purchased  were  sent  to  the  club-house,  and  came 
into  the  possession  of  the  steward,  who  subsequently  paid  the 
plaintiffs  the  amount  of  that  bill.  He  thereafter  continued,  as 
such  steward,  to  act  in  making  purchases  from  time  to  time  in 
the  name  of  the  club;  and,  although  a  private  arrangement 
existed  by  which  the  steward  had  agreed  to  make  these 
purchases' himself,  and  to  furnish  the  articles  to  the  members 
of  the  club  on  his  own  account,  yet  this  arrangement  was  never 
communicated  to  the  plaintiffs.  Upon  these  facts  the  defend- 
ant was  held  liable  for  the  debts  contracted  by  the  steward 
in  the  name  of  the  club. 

§  109.  Actions  for  libel  and  slander— privilegetl 
communications,  etc.  All  communications  by  members 
of  corporate  bodies,  churches  and  other  voluntary  societies, 
addressed  to  the  body  or  any  official  thereof,  and  stating  facts 
which,  if  true,  it  is  proper  should  be  thus  communicated,  are 
privileged.  They  are  not  absolutely  privileged,  so  that  no 
action  will  lie,  even  though  it  be  averred  that  the  injurious 
publication  was  both  false  and  malicious,  but  are  conditionally 
privileged  to  this  extent:  that  the  circumstances  are  held  to 
preclude  any  presumption  of  malice,  but  still  leave  the  party 
responsible,*if  both  falsehood  and  malice  are  affirmatively 
shown.  ^ 

Words  spoken  or  written  in  the  regular  course  of  church 
discipline,  or  before  a  tribunal  of  a  religious  society  to  or  of 
members  of  the  church  or  society,  are,  as  among  the  members 
themselves,  privileged  communications  and  not  actionable 
without  express  malice.  ' 

Among  the  powers  and  privileges  established  by  long  and 
immemorial  usage,  churches  have  authority  to  deal  with  their 
members  for  immoral  and  scandalous  conduct,  and  for  that 

'  Tenney  et  al  v.  N.E.  Protection  ^  Hilliard  on  Torts,  355.  Lucas  v. 
Union,  37"yt.  64.  Case,  9  Bush,  (Kv.)  297 :  Kersliaw  v. 

•^  Cooley  on    Torts,   pg.   2U-215;     Bailey,  1  E.xch.  (Eng.)  743. 
Van  Wyck  v.  Aspinwall,  17  N.  Y. 
190. 


Chap.  5,  §110.]        liability  of  members.  131 

purpose  to  hear  complaints,  to  take  evidence  and  to  decide; 
and  upon  conviction,  to  administer  proper  punishment  bjway 
of  rebuke,  censure,  suspension  and  excommunication.  To  this 
jurisdiction  every  member,  by  entering  into  the  church  coven- 
ant, submits,  and  he  is  bound  1)}'  his  consent.  ' 

When  a  vote  of  excommunication  from  a  church  has  been 
passed,  and  the  offender  thereby  declared  to  be  no  longer  a 
member,  the  sentence  may,  nevertheless  be  promulgated,  by 
being  read  in  the  presence  of  the  congregation.  • 

Where  an  incorporated  society  has  no  jurisdiction  to  expel 
a  member  upon  a  certain  charge  which  has  been  preferred 
against  him,  its  proceedings  in  such  a  case  are  coram  non 
jud(ce\  and,  if  the  charge  made  against  the  member  is  libelous 
under  ordinary  circumstances,  a  resolution  adopted  and 
entered  in  the  minutes  of  the  proceedings,  expelling  the  mem- 
ber for  such  cause,  is  a  libel,  and  the  member  introducing  it 
is  liable  to  an  action.  ' 

§  110.  Privileged  coniiiiuiiications  and  publi- 
cations. Where  a  report  is  made  by  a  subordinate  lodge  to 
the  grand  lodge  of  the  order,  in  accordance  with  the  usual 
rules,  regulations  and  customs  of  the  order,  by  a  member  of  a 
special  committee  thereof,  to  which  was  referred  a  petition  re- 
S])ecting  the  expulsion  of  a  member  of  the  order  from  a  subor- 
dinate lodge,  justifying  the  subordinate  lodge  in  expelling  the 
member  for  perjury,  and  setting  forth  that  the  officers  of  the 
subordinate  lodge  were  unanimously  of  the  opinion  that  the 
statements  sworn  to  by  such  member  in  a  petition  presented 
by  him  to  the  grand  lodge,  were  all  infamously  untrue;  is 
received  and  adopted  by  the  lodge  in  the  usual  course  of  its 
business,  and  thereafter  is  printed  and  published  in  a  pamphlet 
entitled  "The  Grand  Lodge  Journal  of  1S73,"  in  connection 
with  the  general  and  ordinary  transactions  of  the  lodge,  and  in 
the  usual  manner  of  printing  and  ])ublishingthe  journal  of  the 
records  and  proceedings  of  the  lodge,  for  tlie  use  of  the  mem- 
bers of  the  order,  such  publication  is  prima  facie  privileged. 
In  such  a  case  the  occasion  and  manner  of  the  ])ublication 
prev^ent  the  inference  of  malice,  which  the  law  draws  from  un- 

'  Reminiiton   v.  Contrdon,  2  Pick.  "  Farnsworth    v.    Storrs,  5  Cush. 

(Mass.) 310-315;  O'Donaixhue   v.  Mc  (Mass.)  412. 

Govern,  23  Wend  (N.  Y.)2t);  Serva-  ^  p^^.j-ett    v.   Charles,   13  Wend, 

tins  V.  Pichel,  34  Wis.   2SV2 ;    Shurt-  (N.  Y.)  474. 
Ipfif  V.  Stpvens,51  Vt.  501;    31    Am. 
Repts.  G98-note. 


132  LIABILITY   OF    MEMBERS.  [ChAP.  5,  §110. 

authorized  coniraiinications,  and  afford  a  qualified  defense, 
depending  upon  the  absence  of  actual  malice. 

In  such  a  case,  where  the  publishing  is  conditionally  privi- 
leo-ed,  and  where  the  circumstances  of  such  publication  are  such 
as  to  repel  the  inference  of  malice,  and  exclude  any  liability  of 
the  defendant  unless  upon  proof  of  actual  malice,  the  burden 
of  proof  upon  the  trial,  as  to  whether  the  defendant  was  actu- 
ated by  actual  malice,  is  upon  the  plaintiff.  If  the  plaintiff 
o-ives  no  evidence  of  express  malice,  the  defendant  is  entitled 
to  a  verdict.' 

In  an  action  for  slander  the  defendant  set  up  as  a  defense,, 
that  plaintiff  and  defendant  were,  at  the  time  of  the  alleged 
publication,  members  of  an  association  known  as  the  Inde- 
pendent Order  of  Odd  Fellows;  that  the  acts  charged  in  the 
alleged  libel  were  violations  of  the  laws  of  said  order;  and  that 
the  publication  complained  of  was  a  presentment  to  the  lodge, 
of  which  both  parties  were  members,  of  the  charges,  for  the 
purpose  of  having  the  truth  thereof  inquired  into,  and  of  hav- 
ino-\he  plaintiff  dealt  with  according  to  the  laws  of  the  oi-der. 
The  court  said:  "The  law  protects  the  defendant  so  far  as  not 
to  impute  malice  to  him  from  the  mere  fact  of  his  having, 
spoken  words  of  the  plaintiff,  which  are  in  themselves  action- 
able, though  he  may  not  be  able  to  prove  the  truth  of  his  alle- 
o-ations.  But  the  plaintiff  will  be  able  to  sustain  his  action 
for  slander  if  he  can  satisfy,  the  jury  by  other  proofs,  that 
there  was  actual  malice  on  the  part  of  the  defendant,  and  that 
he  uttered  the  words  for  the  mere  purpose  of  defaming  the 
plaintiff.  *  *  *  *  The  law  simply  requires  that  there 
should  not  be  a  want  of  common  honesty  in  preferring  the 
charge." '' 

It  is  stated  in  Addison  on  Torts:  "Whether  the  circum- 
stances under  which  a  communication  was  made  constitute  a 
privileged  communication  or  not,  is  a  question  which  the  court 
has  assl^mied  the  jurisdiction  of  determining,  but,  if  there  is 
any  dispute  about  these  circumstances,  the  question  must  be 
submitted  to  a  jury.  It  is  essential  to  the  existence  of  the 
privileo-e  and  protection  that  the  communications,  under  what- 
ever circumstances  made,  should  be  believed  to  be  true  by  the 
party  making  them;  for  a  person  cannot  shelter  himself  under 
privilege,  if  he  believes  the  charge  imputed  untrue,  unless  he,  at 
the  same  time,  declares  his  belief  in  its  untruth.     If  a  man 

'  Kirkpatrick  v.  Eagle  Lodge,  etc.,  *  Streety  v.  Wood,  15  Barb.  (N.Y.> 
36  Kan.  384.  105. 


OhAP.  5,  §111.]  LIABILITY    OF    MEMBERS.  133 


knowingly  makes  a  false  charge,  there  is  at  once  actual  malice, 
and  the  privilege  is  blown  to  the  winds." 

§  111.  Same  subject  coiitinvied.  An  action  for 
filanderous  words  spoken  of  and  concerning  the  plaintiff  by  an 
unincorporated  mutual  benefit  society,  of  which  he  was.  a 
member  when  the  alleged  tort  was  committed,  will  not  lie 
against  the  society  sued  as  a  .partnership;  but  the  redress,  if 
any,  is  against  the  wrong-doers  in  their  individual  or  non- 
partnership  capacity.  Nor  does  it  make  any  difference  in  this 
respect,  that  in  consequence  of  the  slander,  the  plaintiff  was 
suspended  from  the  benefits  of  membership  for  a  term  of 
years,  and  that  the  action  was  brought  pending  this  term  of 
suspension. 

In  discussing  this  question  the  Supreme  Court  of  Georgia 
says :  "  If,  as  the  declaration  alleges,  the  association  was  a 
partnership,  the  plaintiff  was  a  member  of  it;  and,  after 
diligent  search,  we  have  been  unable  to  discover  any  authority 
supporting  the  theory  that  a  man  can  slander  himself,  either 
when  he  speaks  directly  as  an  individual,  or  when  he  speaks 
indirectly  through  a  partnership  of  which  he  is  a  member. 
Upon  principle,  we  do  not  see  how  he  could  charge  the 
partnership  assets  with  the  damages  that  might  be  recovered, 
he  having  an  interest  in  the  assets  as  part  owner  of  the  same. 
Nor  can  we  see  how  he  can  escape  the  general  rule  that,  in  an 
action  at  law  against  a  partnership,  all  the  partners,  so  far  as 
the  partnership  assets  are  involved,  must  be  defendants.  That 
rule,  applied  to  this  case,  would  require  the  plaintiff  to  sue 
himself.  The  equity  powers  of  the  court  cannot  be  invoked  to 
overcome  this  ol)stacle,  for  a  court  of  equity  has  not,  nor  ever 
had,  jurisdiction  to  decree  damages  for  defamation  or  slander.'" 

where,  by  statute,  suits  are  permitted  by  or  against  a 
treasurer  of  an  unincorporated  society,  with  like  effect  as  if 
all  the  members  are  or  were  sued,  "  as  regards  the  joint  rights, 
property  and  effects  "  of  such  society,  it  is  doubtful  whether 
such  statute  covers  a  suit  for  libel  published  by  a  societv,  and 
whether  it  is  not  confined  to  the  assertion  of  property  rights, 
strictly  so  called.^ 

§112.  Actions  between  members.  In  determin- 
ing  the  proper  remedy   of   members   of   an    unincorporated 

'Gilbert  v.  Crystal  Fountain  (N.  Y.),  12:  Rorke  v.  Russell,  2 
Lodire,  Ga.,  4  S.  E.  llep.  905.  Lansing  (N.Y.),  2U. 

''  i^um-an      v.    Jones,      32     Hun 


134  LIABILITY    OF   MEMBERS.  [ChAP.  5,  §112, 

society  against  each  other,  it  is  necessary  to  inquire  wlietlier 
the  rules  and  scheme  of  the  society  create  a  partnershij)  or 
quasi  partnership  between  the  members.  If  the  liabilities 
which  the  rules  and  scheme  create  are  those  in  the  nature  of 
copartnership,  the  member  must  seek  his  remedy  against  his 
fellow-member  under  the  law  of  partnership ;  and  in  all 
matters  growing  out  of  the  relation  of  such  membership,  the 
only  remedy  is  by  bill  in  equity,  or  action  of  account.' 

If  an  officer  of  the  society  order  goods  for  the  society  from 
a  fellow  member,  the  solution  of  the  question  of  the  personal 
liability  of  the  officer  is  not  to  be  found  by  examining  the 
cases  with  reference  to  the  liability  of  officers  and  members  in 
their  dealings  with  third  persons,  but  by  looking  at  the  rules 
of  the  society  to  see  what  are  the  liabilities  which  they  create. 
If  it  be  found  that,  b}'^  becoming  a  member,  the  seller  did 
not  lose  his  right  of  action  against  any  other  member  for  goods 
sold,  although  they  were  bought  for  the  purposes  of  the  society, 
he  may  sue  the  purchaser  and  those  consenting  to  or  approving 
the  purchase;  and  the  only  question  that  can  then  arise  in  the 
case  is,  whether  the  seller  contracted  to  supply  the  goods  on 
the  credit  of  the  purchasers,  or  whether  he  looked  to  the 
funds  of  the  society  for  payment;  and  this  is  a  question  of 
fact  for  the  jury  to  determine.  These  principles  are  clear,  but 
the  application  of  them  to  the  facts  in  each  individual  case 
is  exceedingly  difficult.' 

Where  the  person  incurring  the  debt  on  behalf  of  the  society 
and  the  person  with  whom  the  debt  is  incurred  are  both  mem- 
bers of  the  same  unincorporated  voluntary  society,  and  where 
the  nature  of  the  agency,  and  the  extent  of  the  powers  of  the 
representative  of  the  society  are  known  to  the  creditor,  such 
representative  or  agent  is  not  individually  liable  for  the  debt. 

A  member  of  a  voluntary  society  formed  for  building  a 
meeting-house,  who  is  appointed  one  of  the  building  com- 
mittee, and  acts  as  such  in  making  contracts  and  procuring 
materials  for  the  building,  is  not  individually  liable  to  pay  for 
services  for  which  he  thus  contracts  with  a  member  of  such 
society,  who  knows  his  agency,  and  who  knows  that  the  con- 
tract is  for  the  benefit  of  the  society,  and  that  it  is  entered 
into  by  him  merely  as  such  agent.  ^ 

1  Niven  v.  Spickerman,   12  John-        ^  Abbott  v.  Cobb,  17  Vt.  593. 
son  (N.  Y.),  401. 

-  Caldicott  V.  Griffith,  22  Eng.  L. 
and  Eq.,  527. 


Chap.  5,  §113.]        liability  of  members.  135 

In  Cheeuy  et  al.  v.  Clark,  3  Yt.  431,  the  court  says:  "The 
subscribers  to  the  articles  of  ap^reement,  not  being  constituted 
a  society  under  the  statute,  with  corporate  powers,  but  being  a 
mere  voluntary  association  of  individuals,  the  question  is, 
whether  the  defendants  who  acted  as  their  committee  in  super- 
intending the  building  of  the  meeting-house,  were  personally 
answerable  for  the  services  performed  by  the  plaintiff  upon  it. 
It  does  not  appear  that  the  defendants  made  any  express 
promise,  or  pledged  their  individual  credit  and  responsibility, 
so  as  thereby  to  impose  a  personal  obligation  upon  themselves; 
nor  does  it  appear  that  any  moneys  were  in  their  hands,  or  that 
any  funds  remained  at  their  disposal,  to  answer  or  pay  for  the 
services.  They  were  appointed  by  the  body  of  the  subscribers 
to  execute  a  mere  trust;  were  bound  to  act  under  the  direction 
and  control  of  the  subscribers,  and  liable  to  be  removed  at  their 
pleasure ;  and  it  appears  that  one  of  them  was  in  fact  removed 
and  another  appointed  in  his  place.  The  plaintiff  was  one  of 
the  subscribers  by  whom  the  defendants  were  appointed;  and 
in  the  absence  of  any  express  contract  or  undertaking  he  can 
have  no  legal  or  equitable  right  to  look  to  the  personal  security 
or  liability  of  the  defendants,  and  hold  them  answerable  out  of 
their  private  funds,  for  work  done  by  him  for  the  benefit  of 
the  subscribers  generally.  Indeed,  as  the  subscribers  to  the 
articles  of  association  \vere  all  equally  interested  in  building  the 
meeting-house,  and  the  plaintiff  and  the  defendants  were  mem- 
bers  of  the  association,  the  case  seems  to  fall  within  the  rule, 
that  one  of  several  persons  jointly  concerned  in  a  common 
purpose  cannot  maintain  an  action  against  all  or  any  of  the 
others  for  work  and  labor  performed  for  their  joint  benefit. 
In  Holmes  v.  Higgins,  1  Barn  and  Cres.  74,  where  a  number  of 
persons  associated  together  for  the  purpose  of  obtaining  an  act 
of  parliament  and  making  a  railway,  and  subscribed  for  shares 
of  £50  each,  it  was  held  that  they  were  partners  in  the  under- 
taking, and  that  a  subscriber,  who  acted  as  their  surveyor,  could 
not  maintain  an  action  for  work  done  by  him  in  character, 
against  all  or  any  of  the  subscribers." 

§  113.     Actions   between   members   eontiniied. 

Where  the  defendant  purchased  a  steamer,  and  had  her  repaired, 
in  the  expectation  of  selling  her  to  an  association  of  which  he 
and  the  plaintiffs  were,  or  were  to  be,  members,  he  was  held 
liable  in  an  action  at  law  to  tiie  plaintiffs,  for  such  repairs, 
whether  the  vessel  was  sold  to  and  em])loyed  by  the  associa- 
tion or  not.    But  if  the  repairs  were  made  by  the  plaintiffs  upon 


136  LIABILITY    OF    MEMBERS.  [ChAP,  5,  §114. 

an  agreement  or  understanding  between  the  defendant  and  the 
plaintiffs,  tliat  the  association  was  to  pay,  or  that  the  plaintiffs 
shonld  look  to  the  association  for  payment,  then  he  is  not  lia- 
ble therefor  in  such  an  action. 

Where  the  question  is,  on  whose  credit  was  the  labor  and 
materials,  sued  for,  done  and  furnished,  each  party  has  the  right 
to  ask  for  instructions  based  on  his  view  of  the  case,  if  the 
evidence  relied  on  be  legally  sufficient  to  warrant  the  conclu- 
sion sought  to  be  deduced  from  it.  ' 

An  action  at  law  will  not  lie  by  one  member,  in  his  right  of 
membership  and  as  the  assignee  of  other  members,  against  a 
contractor  with  the  association,  who  is  also  a  member,  upon  his 
contract  with  the  society.  No  member  has  an  interest  in  the 
property  and  effects  of  the  society,  which  can  be  separated  and 
taken  out  of  the  whole  for  his  sole  use,  until  the  joint  affairs 
are  settled,  the  society  dissolved,  the  mutual  rights  of  the 
members  adjusted,  and  the  ultimate  share  of  each  determined. 
In  any  agreement  made  by  a  contracting  party  with  the 
association  as  such,  and  in  any  right  of  action  arising  thereon, 
each  member  has  an  interest,  but  no  member  has  an  interest 
which  he  can  transfer,  so  that  an  action  can  be  maintained  by 
his  assignee.  In  such  an  agreement  the  defendant  member 
has  as  great  an  interest  as  any  other  member. 

A  court  of  equity,  with  all  the  parties  before  it,  can  grant 
appropriate  relief  in  such  cases.'" 

Where  the  constitution  of  an  unincorporated  society  defined 
its  object  to  be  to  stimulate  a  healthy  interest  in  the  breeding 
and  management  of  pigeons  and  bantams,  and  to  disseminate 
useful  knowledge  in  relation  thereto;  gave  the  board  of  direc- 
tors the  charge  and  management  of  all  public  exhibitions  of 
the  society;  and  provided  that  each  member  should  pay  an 
initiation  fee  and  an  annual  assessment;  and  the  society  held  a 
public  exhibition  and  awarded  premiums,  and  the  expenses, 
including  premiums,  were  greater  than  the  receipts,  a  bill  in 
equity  may  be  sustained  by  those  members  who  paid  the  defi- 
ciency, against  other  members  for  contribution,  if  the  defend- 
ants participated  in  a  vote  to  give  the  exhibition  with  pre- 
miums, or  if  they  assented  to  such  vote.' 

§  114.    Liabilities  of  members  in  Pennsylvania. 

In  Pritchett  v.  Schafer,  2  Weekly  Xotes  of  Cases  (Pa.)  317,  it  was 

'  Wells  V.  Turner.  16  Md.  133.         See   also  Tyrrell   v.  Washburn,  88 
^McMahon  v.  Rauhr.  47  N.  Y.  67.     Mass.  466. 
*Ray    V.   Powers,  134  Mass.    22; 


Chap.  5,  §115.]        liability  of  members.  137 

held  tliat  members  of  an  unincorporated  mutual  benefit  society 
were  jointly  and  severally  liable  to  pay  "  sick  benefits  "  to  co- 
members,  in  the  state  of  Pennsylvania,  but  the  act  of  April  28, 
1876,  of  that  state,  declares  that  members  of  beneficial  societies 
"shall  not  be  individually  liable  for  the  payment  of  periodical 
or  funeral  benefits  or  other  liabilities  of  the  lodge  or  other 
organizations,"  and  provides  that  "  the  same  shall  be  payable 
out  of  the  treasury  of  such  lodge  or  organization." 

Notwithstanding  the  above  act,  such  associations  still  con- 
tinue to  be  partnerships.  The  act  simply  limits  the  remedy. 
It  exonerates  the  members  from  all  individual  liability,  and 
confines  the  execution  to  the  partnership  property.  An  action 
at  law  may  be  maintained  against  the  members,  but  the 
remedy  is  limited.' 

§  115.  Liability  of  ineinbers  suspended  by 
statute  in  'Sew  York.  The  jSTew  York  Code  of  Civil  Pro- 
cedure, at  section  1919,  provides  that  an  action  or  special  pro- 
ceeding may  be  maintained  against  the  president  or  treasurer 
of  an  unincorporated  association,  consisting  of  seven  or  more 
persons,  upon  any  cause  of  action  upon  which  the  plaintiff 
may  maintain  such  an  action  against  all  the  associates  by 
reason  of  their  interest  or  ownership,  either  jointly  or  in  com- 
mon, on  their  liability  therefor,  either  jointly  or  severally. 
Any  partnership  or  other  company  of  persons  which  has  a 
president  or  treasurer  is  deemed  an  association  within  the 
meaning  of  this  section. 

When  an  unincorporated  association,  consisting  of  more 
than  seven  members,  has  been  formed,  and  has  adopted  by- 
laws and  elected  a  treasurer,  an  action  cannot  be  maintained 
against  the  individual  members  thereof  upon  a  debt  due 
from  the  association,  unless  an  action  has  first  been  brought 
against  its  president  or  treasurer,  as  prescribed  by  this 
section.^ 

'  Kurz  V.  Eg.^ert,  9  Weekly  Notes  "Witherhead  v.  Allen,  4  Abb.  Ct.  App. 

of  Cases  126."  Dec.  628;  See.  Tibbits  v.   Blood,   21 

^Flagg  V.  Swift  et  al.,  25   Hun  (N.  Barb  650,  and  Scliuiidt  v.  Gunther,  5 

Y.)  623.  criticising  and   distinguish-  Daly  452. 
ing  Park  T.  Spaulding  10   Hun   128; 


CHAPTER  VI. 


Oflacers. 


Sec  117  I  Powers  and  duties. 

Sec.  118.    Liability  of  oflScers  of  mutual  benefit  society. 

Sec.  119.     Persons  acting  publicly  as  officers. 

Sec.  120.     Election. 

Sec  121.     Officers  holding  over. 

Sec.  122.    Salaries,  fees,  commissions,  etc. 

Sec.  116.  Powders  and  duties.  In  the  absence  of  express 
provisions  in  the  charter  of  a  mutual  beneiit  society,  limiting 
the  appointment  of  its  officers  and  agents,  or  the  scope  of  their 
duties  and  powers,  it  must  be  presumed  that  each  person,  in 
becoming  a  member  of  the  society,  impliedly  consents  that 
it  shall  be  represented  by  such  officers  and  agents  as  are 
reasonably  necessary  for  the  transaction  of  its  business,  and 
that  they  shall  possess  the  powers,  and  perform  the  duties 
ordinarily  possessed  and  performed  by  such  officers  and  agents. 
While  it  is  not  competent  for  the  officers  and  agents  of  a 
society  to  relieve  an  insured  member  from  the  payment  of 
any  assessments  properly  made  against  him,  it  is  competent 
for  them  to  mitigate  the  terms  upon  which  his  policy  would 
be  otherwise  declared  forfeited.  In  regard  to  regular  insur- 
ance  companies,  it  is  well  settled  that  the  agents  of  the  com- 
pany may,  by  acts  binding  on  the  company,  waive  the  causes 
of  forfeiture  declared  in  the  policy,  and  there  is  no  reason  why 
the  principle  may  not  also  apply  to  mutual  benefit  societies, 
where  the  waiver  does  not  substantially  impair  the  rights  of 
creditors  and  policy  holders.' 

But  where  the  charter  or  by-laws  make  it  the  imperative 
duty  of  its  officers  and  agents  to  literally  and  rigorously 
enforce  forfeitures  for  non-payment  of  assessments,  on  the 
day  fixed,  the  members  are  each  bound  by  such  provisions. 

'  Protection  Life,  etc.,  v.    Foote, 
79  111.  361. 

(138) 


Chap.  6,  §117.]  officers.  13^ 


A  member  of  a  mutual  benefit  society  represented,  for  the 
purpose  of  procuring  insurance,  that  he  was  fifty -nine  years  old, 
when  in  fact  he  was  sixty -four  years  of  age.  It  was  claimed, 
after  his  death,  that  the  treasured  of  the  society,  had  received 
assessments  after  he  had  knowledge  of  the  decedent's  true  age. 
The  court  held  that  the  evidence  failed  to  show  that  the  treas- 
urer  had  acquired  any  knowledge  or  information  of  the  false 
representation  while  in  the  discharge  of  any  official  duty,  and 
says:  "  But  assuming  that  the  treasurer  acquired  notice  of  the 
fact,  when  he  received  the  assessments,  he  had  no  power  ta 
ratify  the  invalid  contract.  He  could  not  admit  a  member, 
and  thereby  make  a  contract  of  insurance,  and,  if  he  had  no 
power  to  make  such  a  contract  for  the  corporation,  he  had  no- 
power  to  validate  a  void  contract  by  any  act  of  ratilication."  ' 

§  117.  Powers  and  duties  continued.  As  a  gen- 
eral rule,  an  officer  of  a  mutual  benefit  society  has  no  authority 
to  waive  a  strict  compliance  with  the  by- laws,  on  the  part  of  a 
member.  The  society  has  power  to  establish  by-laws,  and  it 
is  the  imperative  duty  of  the  member  to  comply  with  them. 
Where  the  rules  of  a  society  provided  that  its  by-laws  should 
in  no  case  be  altered,  unless  previous  notice  of  such  intended 
alteration  be  given,  as  prescribed  therein,  and  it  should  be  voted 
for  by  two  thirds  of  all  the  members  present  at  that  meetings 
it  was  held  that  the  president  had  no  right  in  any  case  to  sus- 
pend or  change  the  by-laws  by  his  verbal  act,  and  at  his- 
pleasure,  and  that  a  member  was  chargeable  with  notice,  that 
the  president  had  no  such  right.* 

The  statement  of  the  secretary  of  a  mutual  benefit  society  to 
the  insured  member,  that  he  need  not  pay  his  dues  until  certain 
charges  then  pending  against  him  were  disposed  of,  is  binding 
upon  the  society.' 

Notice  from  the  secretary  of  a  society,  whose  duty  it  is  to 
send  such  notices,  is  notice  from  the  society,  and  it  is  bound 
by  his  acts.' 

A  mutual  fire  insurance  society  issued  a  policy  to  its  treas- 
urer on  a  house  owned  by  him.  The  policy  contained  several 
conditions,  but  not  all  of  the  by-laws  of  the  society.  ^  The 
treasurer  afterwards  sold  the  house  and  lot  to  the  complainant, 

'  Swett  V.  Citizens' Mutual    Relief  =  Jones  etnl.v.  National    Mutual 

Society.  78  Me.  541 :  7  Atl.  Hep.  364.  Ben.  Ass'n.  Ky:  2  S   W.  Hep.  447. 

■*  Hale  V.  Mechanics'   Mutual   etc.,  •'Olmstead    v.     Farmers'   Mutual, 

6  Gray  169;  Ba.xter  V.   Mutual    Ins.  etc.,  5U  Mich.  200. 
Co.  1  Allen  294. 


140  OFFICERS.  [Chap.  6,  §118. 

and  assigned  tlie  policy  to  him.  The  complainant,  during 
the  negotiations,  asked  the  treasurer,  in  the  presence  and  hearing 
of  the  secretary,  whether  the  policy  contained  all  the  condi- 
tions of  insurance.  He  replied  that  it  did,  and  the  secretary 
remained  silent.  After  the  house  had  burned,  complainant 
brought  an  action  at  law  on  the  policy,  to  which  the  society 
pleaded  a  by-law  not  mentioned  in  the  policy.  This  by-law 
he  had  violated,  and  thereby  forfeited  all  right  of  recovery. 

It  was  held  upon  these  facts  that  as  the  othcers  of  a  mutual 
insurance  society  could  not  waive  its  by-laws,  the  society  was 
not  estopped  by  the  treasurer's  declaration  to  the  comjilainant, 
nor  by  the  secretary's  silence  when  such  declaration  was 
made.' 

AYhere  the  trustees  of  a  secret  society  are  vested  with  gen- 
eral power  to  manage  its  property,  a  lease  of  the  lodge  room  • 
to  another   society  for   use   one   night  in   each  week  is  not 
beyond  their  power,  and  is  valid."^ 

Trustees  de  facto  of  a  society,  whether  such  society  Ije 
incorporated  or  not,  may  maintain  an  action  against  a  tres- 
passer for  an  injury  to  the  property  of  the  society.  ' 

§  118.  Liability  of  officers  of  mutual  benefit 
society.  It  is  the  duty  of  the  officers  of  a  mutual  benefit 
society  to  protect  and  properly  disburse  the  funds  that  have 
been  collected  by  assessments  for  the  payment  of  death  losses, 
and  if  the  directors  have  divided  among  themselves  and  other 
incorporators,  and  paid  out  for  expenses,  any  money  which 
ought  to  be  applied  to  the  payment  of  a  death  loss,  they  are 
personally  liable  to  the  beneficiary  for  the  amount  misappro- 
priated or  misapplied,  even  though  they  acted  in  good  faith 
in  the  matter.  * 

But  officers  of  such  a  society,  whose  duties  are  executive, 
and  who  are  subject  to  the  direction  and  control  of  the  direc- 
tors, are  not  liable  for  such  misappropriation  of  funds,  if  they 
have  simply  performed  their  duties  as  directed. 

The  officers  of  such  a  society  are  not  liable  for  money  of  the 
society  deposited  in  banks,  and  lost  by  its  failure,  if  they  acted, 
in  reference  to  such  deposit,  in  good  faith,  and  as  prudent 
men  generally  acted  in  the  same  community.  * 

'  Miller  v.  Assurance  Association,  ■*  Stewart  v.  Lee  Mutual  etc.  Asso- 

42  N.  J.  Eq.  457;  7  Atl.  Rep.  895.  ciation,  64   Miss.  499;    1    Southern 

-  Phillip   et  al.  v.  Aurora  Lodge,  liep.  743. 

87  Ind.  505  *  Stewart  v.  Association,  supra . 

3  Green  v.  Cadv,  9  Wend.  414. 


Chap.  6,  §119.]  officers.  141 

Trustees  or  officers  of  an  unincorporated  society  are  not 
individually  liable  for  its  debts,  unless  they  have  in  some  way 
specially  rendered  themselves  liable.' 

F.  was  elected  "Master  of  Exchequer  "  of  a  lodge  of  Knights 
of  Pythias  in  1879,  and  annuall}^  thereafter  until  1885.  Although 
the  constitution  of  this  order  required  that  this  officer  should 
give  bond  with  security  before  entering  upon  the  duties  of  his- 
office,  F.  w^as  not  required  to  give  bond  until  April  1884,  when 
he  executed  the  bond  sued  on. 

This  bond  covenanted  that  lie  would  render  an  account  for 
all  money  or  other  property  that  should  come,  or  had  already 
come,  to  his  hands,  "or  is  now  in  his  hands,"  At  the  time  he 
executed  the  bond  he  owed  the  lodge  from  $400  to  -$500. 
He  had  placed  the  money  in  his  business,  but  this  fact 
was  not  known,  either  to  the  lodge,  or  to  his  sureties.  When 
his  successor  was  elected  in  1885,  he  owed  the  lodge  $880.17,. 
and  soon  afterward  paid  $500.00. 

An  action  was  brought  on  the  bond  to  recover  the  remain- 
der. 

The  court  held  that  F.  was,  at  least,  a  de  facto  officer  prior 
to  the  time  he  executed  the  bond,  and  the  sureties  could  not 
rely  upon  his  failure  to  execute  bond  as  a  defense  as  to  the 
money  that  came  into  his  hands  during  that  time;  that  the 
amount  which  F.  owed  the  lodge  when  the  bond  was  executed 
was,  in  legal  contemplation,  "  in  his  hands  "  within  the  mean- 
ing of  the  bond,  although  the  money  was  invested  in  his  busi- 
ness, and  his  sureties  were  liable  therefor.'' 

§  119.    Persons    actiiigr    publicly     as     oflicers. 

Persons  acting  publicly  as  officers  of  the  society,  are  to  be  pre- 
sumed rightfully  in  office. 

If  officers  of  an  incorporated  society  openly  exercise  a  power 
which  presu])])oses  a  delegated  authority  for  the  ])urpose,  and 
other  corporate  acts  show  that  the  corporation  must  have  con- 
templated the  legal  existence  of  such  authority,  the  acts  of 
such  officers  will  be  deemed  rightful,  and  the  delegated 
authority  will  be  presumed, 

§  120.  Election.  Where  the  cliarter  of  a  society 
authorizes  the  election  of  its  "  directors  or  managers  at  sucIl 
time  and  place,  in  such  numner,  as  may  be  specified  in  its  bv- 

'  Wolf  et  al.  V.  Schleiffer  2  •  Wilson  v.  Writrht,  8  Ky.  Law 
Brews.  563.  Rep.  963  (Ky.  Sup'r  Ct.) 


142  OFFICERS.  [Chap.  6,  §120. 

laws,"  a  by-law  authorizing  its  members  to  vote  at  all  elections 
either  in  person  or  by  proxy,  is  valid. 

AVhere,  at  an  election  of  directors  of  an  incorporated  mutual 
benefit  society,  the  only  objection  made  was  as  to  the  right 
of  members  to  vote  by  proxy,  *  it  was  lield,  on  quo  wanxinto 
proceedings  against  the  directors  elected,  in  the  absence  of 
proof  that  the  persons  executing  the  proxies  were  members 
of  the  societ3%  or  that  the  proxies  were  properly  executed, 
that  it  would  be  presumed  that  the  proxies  were  regular  and 
proper.' 

The  common  law  required  all  votes  to  be  given  in  person, 
and  when  that  is  a  part  of  the  law  of  the  land,  and  there  is  no 
statute  authorizing  votes  to  be  cast  by  proxy,  the  society  may 
not  make  provisions  for  voting  by  proxy."' 

But  in  State  v.  Tudor,  5  .Day,  329,  it  is  held  that  provis- 
ions of  the  by-laws  of  an  incorporated  society  for  voting  by 
proxy,  are  matters  of  internal  regulation  and  convenience,  M'ith 
which  courts  will  not  interfere,  even  though  that  mode  of 
voting  is  not  sanctioned  by  any  statutory  provision. 

Where  two  elections  for  trustees  of  a  religious  incorporated 
society  were  held  on  the  same  day,  one  held  before  persons 
designated  in  the  manner  customary  with  the  congregation, 
and  held  at  the  usual  place,  and  the  other  at  another  place,  the 
persons  having  a  majority  of  votes  at  the  election  conducted 
at  the  usual  place,  and  in  the  usual  manner,  are  to  be  considered 
as  duly  elected  over  others  voted  for  at  a  different  place  of  elec- 
tion, though  the  persons  holding  the  latter  election  were 
excluded  from  the  usual  place  of  election,  and  though  the 
latter  had  a  majority  of  all  of  the  votes  cast  at  both  places  of 
election.' 

On  the  trial  of  a  quo  vmrranto  proceeding  in  which  the 
issue  is  on  the  legality  of  the  election,  evidence  may  be  given 
of  conversations  and  transactions,  threats  and  confederacies  of 
members,  etc.,  previous  to  the  election,  if  they  were  con- 
nected with,  and  might  have  had  an  influence  on  it.' 

Where  the  charter  gave  to  the  society  power  "  to  make 
rules,  by-laws  and  ordinances,  and  to  do  everything  needful  for 
the  good  government  and  support "  of  the  society,  it  was 
held  that  the  society  had  power  to  make  a  by-law  vesting  the 
appointment  of  inspectors  of  their  elections  in  the  president  of 

'  People  ea;  reZ.  V.  Crossley,   69  111.  ^  J uker  v.  Commonwealth,  20   Pa. 

195.  St.  484. 

"Taylor  V.  Griswold  2  Green  (N.  "^  Commonwealth  v.  Woelper  e<  rtZ. 

-J.)  222.  3  Sar.  &  R.  (Pa.)29. 


Chap.  6,  §121.]  officers.  143 

the  society,  and  to  make  a  bj-law  prohibitincr  tickets  from 
being  counted  at  an  election,  which  had  other  things  on  besides 
the  names. 

And  it  is  a  violation  of  snch  a  by-law  as  last  above  men- 
tioned, to  have  an  eagle  engraved  on  such  tickets.' 

When  the  mode  of  electing  officers  is  not  regulated  by  the 
charter,  a  corporation  may  make  by-laws  to  regulate  the 
election  .2 

Where  an  office  in  a  society  is  not  created  or  expressly 
authorized  by  state  law,  but  is  one  created  by  an  unincorpor- 
ated society,  and  filled  by  election  by  a  body  which  possesses- 
no  corporate  powers  or  functions,  the  courts  of  the  state  have 
no  authority  whatever  over  the  office,  or  over  the  election  to  it. 
These  are  controlled  exclusiv^ely  by  such  society,  and  the 
decisions  of  the  society  upon  the  legality,  or  the  result  of  such 
elections,  are  hnal. 

Such  an  office  cannot  be  made  the  subject  of  qiio-ioarranto 
proceedings.^ 

§  121.  Officers  holding-  over.  In  every  case  of 
corporations  created  by  statute,  so  far  as  the  statute  directs 
and  provides,  it  must  rule;  but  in  cases  pretermitted  by  the 
statute,  there  are  numerous  princi])les  of  common  law  which 
apply,  and  guide  and  sustain  the  corporation ;  and  to  ward  off 
their  application,  it  would  be  necessary  for  the  legislature  to 
use  negative  expressions,  or  such  as  would  exclude  those 
general  rules  of  law.  It  is  one  of  those  general  rules  that  if  a 
corporation  fails  to  elect  officers  on  its  corporate  day  or  time, 
still  the  corporation  does  not  cease;  the  old  officers  retain  their 
powers,  and  may  act  until  they  are  superseded  by  a  new 
appointment.  Such  officers  are  subject  to  liability  on  their 
bonds  as  much  after,  as  befoi-e  the  time  for  which  they  were 
elected  expires,  if  they  continue  to  act,  and  no  subsequent 
election  has  taken  place.'' 

§  122.  Salary,  fees,  coiiiinissioiis,  etc.  Where 
there  is  no  agreement  between  the  society  and  one  of  its 
officers,  that  the  officer  is  to  receive  any  salary  for  his  services, 

'  Commonwealth  v.  Woelper  et  al,  *  Weir  v.  Bush,  4  Littell  (Ky.). 
3  Sar.  and  R.  (Pa.),  28.  430;    People     v.   Runkel,    9    John 

-  Newling  v.  Francis,  3  T.  R.,  189.     Rep.,  147. 

'  Ter  Vree   v.  Geerlintrs  et  al.-,  55 
Mich,  562. 


144  OFFICERS.  [Chap.  6.  §122. 

the  right  to  such  compensation  must  depend  upon  the  usage 
in  like  cases. 

Where  an  officer  has  not  only  made  no  charge  against  the 
society  from  time  to  time,  as  he  has  made  reports  to  it  of  his 
stewardship,  but  has,  as  shown-by  the  minutes  of  the  proceed- 
ings, received  the  thanks  of  the  society  for  his  gratuitous  and 
able  management  of  the  affairs  under  his  control  as  such 
officer,  it  must  be  held  that  he  may  not  charge  the  society  for 
such  services.' 

Trustees  of  a  society,  having  voted  to  themselves  and 
accepted  designated  sums  of  money  as  compensation  for  their 
services  for  particular  years,  liave  no  power,  in  subsequent 
vears  of  their  service,  to  vote  themselves  "back  pay"  for  their 
services  during  such  former  years. 

Such  trustees  have  no  authority,  by  virtue  simply  of  their 
trusteeship,  to  act  for,  or  bind  their  society,  except  in  their 
aggregate  and  administrative  capacity  as  a  board;  and  where 
they  assume,  by  virtue  of  their  trusteeship,  to  act  in  the 
separate  and  individual  capacity  of  treasurer,  secretary,  or  as 
general  or  special  agent  of  their  association,  they  cannot 
thereby  create  against  it  a  legal  liability  to  compensate  them 
as  trustees  for  such  services. 

Such  trustees,  unless  specially  invested  with  the  additional 
capacity  and  authority  of  officers  or  agents,  are  limited  in  their 
claims  for  compensation  to  such  sums  as  will  reasonably 
compensate  them  for  the  time  and  expense  incurred  in  going 
to,  attending  and  returning  from,  their  official  meetings,  and 
for  their  services  while  in  session.'^ 

Trustees  are  charged  with  the  duty  of  faithfully  executing 
the  trust  which  the  laws  and  regulations  impose  on  them. 
They  are  entitled  to  a  reasonable  compensation  for  the  service 
rendered;  but  any  plan  or  scheme  by  which  money  is  collected 
from  members  by  assessment  or  otherwise,  with  a  view  to 
their  individual  proilt,  and  beyond  what  is  necessary  to  defray 
the  reasonable  expenses  of  executing  the  trust,  is  a  breach  of 
trust.^ 

Where  officers  and  directors  of  a  mutual  benefit  society,  en- 
gaged in  the  business  of  issuing  wagering  policies,  have  divided 
among  themselves  the  surplus  funds  of  the  society  as  compen- 
sation for  their  own  services,  a  decree  may  be  entered  against 

'  Vestry  and  Wardens  v.  Barks-  ''  State  v.  Standard  Life  Associa- 
dale,  1  Strob.  Eq.  (S.  Car.),  197.  tion,  38  Ohio  St.,  281. 

•  State  ex  rel  v.  Peoples'  etc,  Ass'n, 
42  Ohio  St.,  579. 


Chap.  6,  §122.]  officers.  145 

the  officers  and  directors  jointly,  in  favor  of  a  receiver 
appointed  on  dissolution  of  the  company,  for  the  amount  of 
the  funds  fraudulently  misappropriated.' 

The  salaries  of  officers  of  voluntary  societies  must  not, 
especially  when  the  officers  fix  the  amount  of  their  own 
salaries,  be  out  of  proportion  to  the  amount  of  responsibility 
and  labor  devolving  upon  them.  And  where  it  is  shown  that 
the  officers  of  the  society  seem  to  regulate  their  salaries  rather 
by  the  condition  of  its  expense  fund  than  by  the  compensation 
actually  earned,  courts  will,  upon  application,  interfere  to  pro- 
tect the  interests  of  the  members.'' 

']\IcCarty's  Appeal,  17  Weekly  'State  ex  rel  v.  Peoples'  etc.  Ass'n, 
Notes  of  Cases,  183.  42  Ohio  St.,  597. 


10 


CHAPTER   VII. 


Meetings  of  the  Society. 


Sec.  123.  Notice  of  meetings. 

Sec.  1'34.  Rules  governing  future  meetings. 

Sec.  125.  It  is  the  dutj'  of  members  present  to  vote,  etc. 

Sec.  126.  When  quorum  is  presumed  to  have  been  present. 

Sec.  127.  When  corporate  acts  are  binding, 

Sec.  128.  Meetings  on  Sunday. 

Sec.  123.  Notice  of  meeting^s.  If  the  charter  or 
by-laws  of  a  society  fix  the  time  and  place  at  which  regular 
meetings  shall  be  held,  no  further  notice  to  the  members  is 
necessary. 

But  where  particular  business  of  great  importance  and 
extraordinary  character  is  to  be  brought  before  a  regular  meet- 
ing, notice  of  the  meeting,  and  the  particular  object  of  it,  shoidd 
be  given. 

A  notice  of  a  special  meeting  must  always  be  given.  It 
should  be  given  to  the  member  in  person,  unless  it  is  other- 
wise provided  in  the  charter  or  by-laws. 

A  notice  of  a  meeting  should  state  specifically  the  time  when, 
and  the  place  where  it  will  be  held,  and  the  particular  business 
which  will  come  before  the  meeting. 

Where  the  charter  or  by-laws  do  not  prescribe  how  long 
before  a  meeting  a  notice  shall  be  served,  it  must  be  served  a 
reasonable  time  before  such  meeting. 

A  notice  of  a  special  meeting  of  a  society,  which  does  not 
state  the  business  to  be  transacted,  does  not  authorize  a  vote 
to  dissolve  the  association  and  dispose  of  its  property.' 

When  a  member  of  a  society  is  present  at  a  meeting,  and 
participates  in  the  proceedings  he  complains  of,  such  proceed- 
ings not  being  improper  in  themselves,  not  subversive  of  the 
object  for  which  the  society  was  formed,  he  is  estopped  from 
objecting  to  the  irregularity  of  the  meeting  and  the  insuffi- 
ciency of  the  notice  of  it.^ 

'  St.  Mary's  Ben.  Ass'n.  v.  Lynch,     Pr.  87 ;   Hussey  et  al.  v.  Gallagher  et 
N.  H.  9  Atl.  Rep.  98.  al.,  61  Ga.  86. ' 

■  Fischer  v.  Raab,  et  al.  57    How. 

(146) 


'Chap.  7,  §124.]  meetings.  147 

Where  the  organic  law,  the  charter,  or  the  by-laws  prescribe 
a  form  of  notice,  or  the  manner  in  which  it  shall  be  served, 
the  notice  must  conform  to  these  recjuirements.  If  it  fails  so 
to  conform,  the  proceedings  of  a  meeting  held  pursuant 
thereto,  are  invalid.' 

All  members  of  a  society  are  presumed  to  know  of  the  times 
appointed  by  the  charter,  constitution  or  by-laws,  for  the 
transaction  of  particular  business;  and,  therefore,  no  special 
notice  is  required  to  be  given  of  such  meeting,  or  of  the 
intention  to  transact  such  business.  A  society  can  transact 
any  business  at  an  adjourned  meeting,  which  could  hav^e  been 
done  at  the  original  meeting,  the  former  being  but  a  contin- 
uation of  the  latter.  No  new  notice  of  the  adjourned  meeting 
is  necessary. - 

But  if,  at  a  regular  meeting,  notice  is  given  that  a  special 
meeting  has  been  called^  notice  of  such  meeting  should  be  sent 
to  the  members,  for  there  is  no  presumption  that  persons  not 
present  at  a  regular  meeting  knew  what  was  done  there.^ 

It  is  a  presumption  of  law,  that  every  meeting  of  a  society 
was  law^fully  and  regularly  held,  and  that  the  proper  notice 
of  it  had  been  given.  It  is  for  him  who  attacks  the  legality 
and  validity  of  a  meeting,  to  prove  want  of  notice,  or  its  insuf- 
liciency.^ 

§  124.  Rules  jyoverniiig:  future  uieetiugsof  the 
society.  An  enactment  made  by  one  meeting  of  the  society 
to  govern  the  proceedings  of  future  meetings,  is  inoperative 
beyond  the  pleasure  of  the  society,  acting  by  a  majority  vote 
at  any  regular  meeting.  The  power  of  the  society  to  enact  its 
laws  is  continuous,  residing  in  all  regular  meetings  of  the 
society  so  long  as  it  exists.  Any  meeting  can,  by  a  majority 
vote,  modify  or  repeal  the  law  of  a  previous  meeting,  and  no 
meeting  can  bind  a  subsequent  one  by  irrepealable  acts  or  rules 
of  procedure.  The  power  to  enact  is  the  power  to  repeal. 
A  by-law  requiring  a  two-thirds  vote  of  members  present  to 
alter  or  amend  the  laws  of  the  society,  may  itself  be  altered, 
amended,  or  repealed  by  the  same  power  which  enacts  it.' 

'Stevens  v.  Eden  Meeting  House  •*  Society    v.    Weatherly,   75    Ala. 

Society,  12  Vt.  688.  248;  Porter  v.    Robinson.  30   Hun. 

■^Wjirren  v.    Mower,  11   Vt    385;  209. 

Scadding  V.  Lorant,  5  Ensr.  L  *&Eq.  'Com.  v.  ]\Iayor  of   Lancaster,  5 

Ifi:  Smith  V.  Law,  21  N.  Y.  296.  Watts   152;  Kicliardson  v.  Society, 

=  People  V.  Batchelor,  22  N.  Y.  128.  58  N.  H.  187. 


148  MEETINGS.  [Chap.  7,  §127. 


§  125.    It  is   the  duty  of  members  present   to 

vote.  When  the  proper  presiding  officer  of  a  society  puts  a 
question  to  a  vote,  it  is  the  duty  of  every  member  to  respond, 
or  be  counted  with  the  greater  number,  because  he  is  supposed 
to  have  assented  beforehand  to  the  ])rocess  pre-establislied  to 
ascertain  the  general  will. 

But  the  rule  of  implied  assent  is  certainly  inapplicable 
where  the  proceedings  are  revolutionary  in  their  character,, 
and  the  question  is  not  put  by  the  proper  presiding  officer. 

The  refusal  of  an  appeal  from  the  decision  of  the  presiding 
officer  is  no  ground  for  his  degradation  at  the  call  of  a  minor- 
ity; nor  could  it  impose  on  the  majority  an  obligation  to  vote 
on  the  question  when  put  unofficially,  and  out  of  the  usual 
course.  In  such  a  case,  the  rule  of  implied  assent  does  not 
apply,  and  such  a  vote  of  degradation  cannot  be  sustained  by 
the  constructive  votes  of  those  who  remain  silent.' 

All  persons  present  at  a  meeting  at  which  a  vote  is  taken, 
disposing  of  a  fund  of  the  society,  if  no  one  dissents,  are 
considered  as  voting  with  the  majority  for  the  motion,  and 
assenting  thereto.  Their  right  to  the  fund  is  concluded.  But 
the  rule  is  otherwise  as  to  those  not  present.s 

§  136.  When  quorum  presumed  to  have  been 
present.  Where  it  is  not  usual  to  mention  on  the  minutes 
the  names  or  number  of  those  present,  and  the  charter  requires 
two-thirds  to  form  a  quorum,  it  will  be  presumed  that  the 
required  two-thirds  assembled,  where  it  is  stated  on  the  min- 
utes that,  on  due  invitation,  the  members  met.^ 

§  137.    When   corporate   acts   are  binding-.     In 

aggregate  societies,  the  acts  of  the  majority,  in  cases  within 
the  charter  powers,  bind  the  whole.  The  majority  here  means 
the  major  part  of  those  who  are  present  at  a  regular  meeting. 
There  is  a  distinction  taken  between  a  corporate  act  to  be 
done  by  a  select  and  definite  body,  as  by  a  board  of  directors, 
and  one  to  be  performed  by  the  members  of  the  society ;  the 
majority  of  the  definite  body  must  be  present,  and  then  a 
majority  of  the  quorum  must  decide;  but  a  mai'ority  of  the 
members  present  may  act." 

'  Commonwealth    v.     Green,      4        ^Commonwealth  v.  Woelper  et  al,. 
Whart.  (Pa.),  537-603.  3  Sar.  &  R.,  28. 

^Abels  V.  McKeen,  18  N.J.  Eq.,        •'3  Kent,  Com.,  293. 
462;  Richardson  v.  Society,  58  N.H. 
187. 


'Chap.  7,  §128.]  meetings.  149 

When  no  special  provision  is  made  by  the  constitution  of  a 
•corporation,  the  whole  are  bound  by  the  acts,  not  only  of  the 
major  part,  but  of  the  major  part  of  those  who  are  present 
at  a  regular  coi-porate  meeting,  whether  the  number 
present  be  a  majority  of  the  whole  body  or  not.  And,  though 
a  particular  constitution  require  the  presence  of  a  majority  of 
the  whole  number,  yet  the  concurrence  and  consent  of  a 
majority  of  the  whole  is  not  necessary;  it  is  sufficient  that  a 
majority  of  the  number  present  concur.  So,  where  a  number 
less  than  the  majority  of  the  whole,  are  by  a  particular  consti- 
tution competent  to  do  a  corporate  act,  the  act  of  a  majority 
of  that  smaller  number  is  equivalent  to  the  act  of  the  majority 
of  the  whole.' 

An  incorporated  society  can  only  speak  and  act  through  the 
medium  prescribed  by  law  When  the  law  prescribes  this 
medium  to  be  the  board  of  directors,  the  society  at  large  may 
not  assume  the  management  and  direction  of  its  affairs. 

At  a  meeting  of  the  members  of  an  incorporated  mutual 
benefit  society,  a  resolution  was  passed  directing  a  larger 
amount  to  be  paid  to  certain  beneficiaries  than  the  amount  of 
the  respective  assessments  collected  for  their  benefit.  A  by-law 
•of  the  society  provided  that  no  money  could  be  drawn  or  appro- 
priated from  the  treasury  without  the  order  of  the  directors. 
The  Supreme  Court  of  California  held  that,  in  the  absence  of 
an  adoption  or  ratification  by  the  directors,  the  resolution  was 
inoperative,  as  in  that  state  an  incorporated  society  could  only 
act  by  its  board  of  directors.''^ 

§  138.  3Ieetiiigrs  on  Sunday.  In  People  v.  Youn^ 
Men's  Father  Mathew  Benevolent  Society,  65  Barb.  (N.  Y?) 
357,  a  member  was  expelled  from  the  society  at  a  meeting  held 
•on  Sunday  evening — and  the  notice  of  charges  and  the  meeting 
was  also  served  on  Sunday.  He  applied  to  be  reinstated  on 
the  ground  that  the  proceedings  and  notice  were  void.  But 
the  court  held  that,  however  objectionable  it  might  be  to  hold 
business  meetings  of  such  a  society  on  that  day,  it  was  not 
forbidden  by  statute  of  the  State  of  New  York,  and,  in  the 
opinion,  the  court  says:  "The  relator  chose  to  belong  to  a 
society  which  held  all  its  regular  meetings  on  that  day,  and  if, 
at  such  a  meeting,  he  was  served  with  a  notice  to  attend  the 
next  meeting,  it  does  not  rest  with  him   to  make  the  objec- 

'2  Bjicon's  Abridirmont,  459. 
'^In  re  L.aSolidarite  Mut.  Ben.  Asso- 
ciation, 08  Cal.  3i)2. 


150  MEETINGS.  [Chap.  7,  §128. 

tion  *  *  *  *  At  the  comraon  law,  judicial  proceedings 
only,  were  prohibited  on  Sunday.  Hence  judicial  proceedings 
on  Sunday  are  void  at  common  law.  But  all  other  business 
transactions  are  valid,  except  so  far  as  prohibited  by  our 
statute."  * 

Speaking  parenthetically  of  the  fact  disclosed  by  the  record, 
that  a  member  had  been,  on  Sunday,  expelled  from  a  mutual 
benefit  society  consisting  of  Israelites  only,  the  Supreme 
Court  of  Pennsylvania  in  The  Society  for  the  Visitation  of  the 
Sick  V,  Commonwealth  ex  ret.  Max  S.  Meyer,  52  Fa.  St.  125, 
says :  "  It  may  not  be  amiss,  with  a  view  to  call  attention  to  it,  to 
notice  that  this  was  not  an  ecclesiastical  or  church  trial,  con- 
cerning matters  of  conscience.  It  was  an  ordinary  secular  or 
business  affair,  being  the  same  kind  of  trial  which  any  other 
corporation  mi^ht  engage  in.  It  might  be  well  to  consider 
how  far  such  trials  on  Sunday  comport  with  the  legislation  of 
the  state  and  the  genius  of  our  institutions.  It  will  also  be 
remembered  that  Jews,  who  regard  the  seventh  day  only  as 
their  Sabbath,  are  bound  to  observe  the  civil  regulations  made 
for  the  observance  of  the  Christian  Sabbath." 

'  Citing  Merritt  v.  Earle,  31  Barb. 
38,  41. 


CHAPTER  VIII. 


Jurisdiction  of  Courts  over  Societies.     Part  L 


Sec.  129.    Visitorial  power  of  courts. 

Sec.  130.  )  Courts  will  not  take  jurisdiction  until  remedies  provided  for 

Sec.  131.  )         in  the  society  have  been  exhausted. 

Sec  133.     Courts  may  not  be  ousted   of  jurisdiction  over  societies,  by 

contract. 
Sec.  133.    When  courts  will  not  take  jurisdiction. 
Sec  134.     Injunction  of  court  interfering  with  internal  management. 
Sec.  135.     Injunction  to  restrain  illegal  act  of  the  society. 
Sec.  136.    Injunction  to  restrain  society  from  carrying  on  business  upon 

erroneous  principles  and  plans. 

S  *^    ISS  \  ^^"'^'^'■^  ^^  unincorporated  societies  in  courts  of  justice. 

Sec.  139.     Dissolution  of  an  unincorporated  society. 

S  ^"  141    \  When  dissolution  of  a  society  will  not  be  decreed. 

Sec.  142.     Dissolution  of  an  incorporated  society. 

Sec  143.     When  a  society  is  dissolved  by  its  own  act  or  neglect. 

Sec.  139.  Visitorial  power  of  courts.  The  visi- 
torial or  superintending  power  of  the  state  over  incorporated 
societies  created  by  the  legislature  will  always  be  exercised  in 
proper  cases,  through  the  medium  of  the  courts  of  the  state, 
to  keep  those  corporations  within  the  limits  of  their  lawful 
powers,  and  to  correct  and  punish  abuses  of  their  franchises. 
To  this  end,  the  court  will  appoint  receivers,  and  issue  writs  of 
quo  warranto^  mandamus^  or  injunction,  as  the  exigencies  of 
the  particular  case  may  require;  will  inquire  into  the  grievance 
complained  of,  and,  if  the  same  is  found  to  exist,  will  apply 
such  remedy  as  the  law  prescribes.  Every  corporation  of  the 
state,  whether  public  or  ])rivate,  civil  or  municipal,  is  subject 
to  this  superintending  control,  although  in  its  exercise  differ- 
ent rules  may  be  applied  to  different  classes  of  corpor- 
ations.' 

But  over  unincorporated  societies  the  state  has  no  visitorial 
or  superintending  control.     They  are  not  created  l)y  the  state, 

'  State  ex  rcl.  v.  Chamber  of  Com- 
merce, 47  Wis.  670. 

(151) 


152  JURISDICTION.  [Chap.  8,  §130. 

but  are  brought  into  being  by  the  contract  of  the  members. 
Courts  will  interfere,  on  the  application  of  an  aggrieved  mem- 
ber, to  see  that  his  property  or  civil  rights  are  governed  accord- 
ing to  such  contract,  but  will,  in  no  wise,  interfere  with  the 
terms  of  the  contract,  so  long, as  they  are  not  contrary  to 
law. 

The  doctrine,  as  laid  down  by  the  Supreme  Court  of  Illinois 
in  People  e^  rel.  Rice  v.  The  Board  of  Trade  of  Chicago,  80 
111.  134,  that  the  power  of  incorporated  voluntary  societies  to 
enact  by-laws  is  unlimited,  and  that  courts  will  not  interfere 
with  the  enforcement  of  any  by-law  thus  enacted,  is  in  con- 
'flict  with  the  decisions  and  principles  on  this  subject. 

§  130.  Courts  will  not  take  jurisdiction  until 
remedies  provided  for  in  society  Iiave  been 
exhausted.  It  is  the  law  of  voluntary  societies,  whether 
incorporated  or  unincorporated,  that  they  may,  in  all  matters 
relating  to  their  internal  and  governmental  affairs,  and  con- 
cerning the  relations  and  rights  of  members,  as  such,  provide 
methods  for  redressino;  grievances  and  decidino;  controversies, 
and  may  compel  members  to  resort  to  the  prescribed  methods 
of  procedure,  before  invoking  the  power  of  the  courts  of  the 
land. 

Men  voluntarily  enter  such  societies,  and,  in  becoming 
members,  subscribe  to  their  laws.  It  is,  therefore,  no  hard- 
ship to  require  them,  before  seeking  their  remedy  under 
the  law,  to  exhaust  their  remedy  under  the  contract  of  mem- 
bership. The  harmony  and  efficiency  of  such  societies 
require  that  they  be  permitted,  as  far  as  possible,  to  carry  out 
their  purposes  and  objects  in  the  manner  and  mode  which 
shall  be  agreed  upon  by  the  members,  and  that  the  right  to 
resort  to  the  courts  for  the  settlement  of  controversies  and 
grievances  be  restricted. 

When  the  charter,  constitution,  or  by-laws  of  the  society 
require  a  member  to  first  seek  redress  within  the  society,  and 
by  appeal  to  carry  the  question  to  its  highest  tribunal,  he  has 
no  right  to  bring  an  action  against  the  society  in  a  court  of 
the  land,  until  he  has  exhausted  his  remedy  in  its  tribunals.* 

The  plaintiffs  were  members  of  a  beneficiary  association 
which  received  its  charter  from,  and  was  subject  to,  the  laws 
and  usages  of  a  state  association,  both  organizations  being 
subordinate   to   a   national    association   or    council.     Acting 

'  Poultney  v.  Bachman,  31  Hun  Y.  508;  Harrington  v.  Association, 
N.  Y.  49 ;  Lafond  v.   Deems,  81   N.    70  Ga.  340. 


Chap.  8,  §131.]  jurisdiction.  153 

under  its  rules,  the  state  association  declared  forfeited  the 
charter  of  the  first  mentioned  association  for  non-compliance 
with  the  constitution,  laws,  and  usages  of  the  state  council, 
and  took  its  property,  as  provided  in  its  charter.  The  gen- 
eral laws  of  tlie  national  council  provided  that  a  member 
of  the  order  might  appeal  from  the  action  of  his  state  or 
subordinate  council,  pointed  out  the  steps  to  be  taken,  and 
declared  that  the  decision  of  a  state  council  should  be  binding 
until  reversed  by  the  national  council.  INo  appeal  to  the  latter 
was  made  by  the  plaintiffs,  but  they  at  once  resorted  to  the 
public  courts.  The  court  held  that  a  bill  in  equity  by  the 
plaintiffs  to  recover  back  their  property  so  taken,  on  the 
ground  that  their  charter  had  been  illegally  forfeited,  could 
not  be  maintained  until  the  plaintiffs  had  first  sought  the 
relief  prayed  for,  from  the  tribunals  provided  by  the  associa- 
tion.' 

The  rights  of  different  persons  claiming  to  represent  a  sub- 
ordinate lodge,  are  to  be  determined  by  the  constitution 
■of  the  grand  lodge,  and,  although  a  subordinate  lodge 
has  done  acts  which  render  it  liable  to  have  its  charter 
•declared  forfeited  to  the  grand  lodge,  yet,  until  such  for- 
feiture has  been  declared,  it  is  entitled  to  possession  of  the 
property  of  the  lodge;  and  a  bill  in  equity  cannot  be  main- 
tained against  its  members  to  recover  possession  of  such  pro- 
perty, by  persons  claiming  to  be  recognized  by  the  grand 
lodge  as  the  subordinate  lodge,  until  such  charter  has  been 
formally  declared  forfeited  by  the  grand  lodge,  and  until  the 
remedies  within  the  society,  prescribed  by  the  constitution, 
liave  been  exhausted.'' 

There  is  no  presumption  that  societies  provide  methods 
within  themselves  for  redressing  grievances,  or  settling  con- 
troversies, and,  in  the  absence  of  evidence  showing  the  exis- 
tence and  terms  of  such  provisions,  the  courts  will  assume  that 
there  are  none.' 

§  131.  Same  subject  continued.  Where  the  society 
makes  ])rovision  for  the  settlement  of  controversies  between 
it  and  its  members,  or  between  its  members,  concerning  its 
government,  its  dissolution,  or  its  property,  courts  will  refuse 
to  take  cognizance  of  such  controversies  until  those  who  have 
grievances  have,  in  the  iirst  instance,  resorted  to  and  exhausted 

'Oliver  et  al.  v.  Hopkins  et  nl.  'Chamberlain  v.  Lincoln.  129 
Mass.  10  N.  E.  Rep.  776.  Mass.  70. 

» Olery  v.  Brown,  31  How.  Pr.   93. 


154  JURISDICTION.  [ClIAP.  8,  §132. 

the  remedies  provided  hy  the  society;  and  it  is  not  necessary, 
in  such  case,  that  the  language  of  such  provisions  sliall  make 
it  imperative  on  the  members  to  exhaust  these  remedies,  but 
it  is  suthcient  that  the  society  has  afforded  a  means  for  a 
settlement  within  the  society  itself;  the  mere  provision  of 
such  a  means  abridges  the  right  to  appeal  to  the  courts,  until 
the  prescribed  means  have  been  pursued.  This  rule  also  pre- 
vails in  matters  of  discipline,  in  the  expulsion  and  suspen(?ion 
of  members,  and  arises  from  the  fact  that,  in  such  cases,  the 
controversy  springs  from  the  contract  of  membership,  and  is  a 
matter  of  internal  regulation.  With  such  matters  courts  are 
loth  to  deal,  and  will  take  jurisdiction  only  when  compelled 
to  do  so.  But  it  has  been  held  that  where  a  member  appears 
in  the  relation  of  a  creditor  of  the  society,  he  is  not  bound  to 
present  his  claim  to  the  tribunals  of  the  society,  unless  such 
provisions  stipulate  expressly  that  he  must  tirst  submit  his 
claim  to  the  tribunals  of  the  society,  before  seeking  to  enforce 
it  at  law.' 

Courts  will  not  interfere  at  all  in  the  matters  of  a  society, 
where  there  are  no  civil  or  property  rights  involved,  and,  even 
where  the  controversy  is  concerning  such  rights,  courts  will 
not  act  unless  they  see  clearly  that  they  are  obliged  to  take  jur- 
isdiction. They  will  only  intei-fere  to  protect  some  civil  right,, 
or  for  the  due  disposal  and  administration  of  property."* 

§  133.  Courts  may  not  be  ousted  of  juris« 
diction.  But  it  has  been  held  that  while  a  society  may,  by 
its  by-laws,  compel  members  to  submit  their  controversies 
concerning  its  property  and  their  rights  therein,  to  the  tribu- 
nals of  the  society,  before  seeking  the  aid  of  the  courts,  it  may 
not  prohibit  them  entirely  from  resorting  to  the  courts.  So 
long  as  the  members  of  the  society  recognize  its  decisions  as 
final  on  questions  of  property  rights,  the  law  interposes  no 
objection ;  but  when  a  member  refuses  to  abide  by  the  decision 
of  the  society,  depriving  him  of  his  interest  in  its  property, 
it  is  the  duty  of  the  courts,  on  his  application,  to  afford  him 
his  proper  remedy. 

The  remedy  of  an  expelled  member  who  has,  by  the 
judgment  of  the  society,  been  deprived  of  his  rights  in  its- 
property,  has  already  been  treated  of;  the  question  now  is, 
how  far  the  judgments,  orders  and  decrees  of  the  society  are 

^See  Action  on  Contract, Chap.  XV.    Ellison    v.    Bignold,    2    Jacobs    & 
»Rigby  V.  Connell,  28  W.  K.  650;    Walkers  503. 


Chap.  8,  ^133.]  jurisdiction.  155- 

binding  upon  existing  members.  This  question  frequently 
arises  in  the  attempt  of  a  grand  or  supreme  lodge,  whose 
orders,  it  is  agreed,  must  be  obeyed,  to  take  from  a  subordi- 
nate lodge  its  property  and  its  rights  in  the  order.  It  may  be 
laid  down  as  the  law  that,  whatever  powers  the  higher  lodges 
or  councils  of  a  society  may  have,  to  make  rules  or  laws  for 
the  government  of  subordinate  lodges,  the  courts  can  never 
recognize  as  valid  any  by-law,  the  effect  of  which  is  to  give  to 
these  higher  bodies  the  linal  right  to  determine  when,  imder 
what  circumstances,  and  for  what  causes,  the  property  of  the 
subordinate  lodges  may  be  taken,  nor  will  the  courts  permit 
or  recognize  the  enforcement  of  any  such  by-law,  when  its 
enforcement  will  accomplish,  and  is  designed  to  accomplish, 
the  confiscation  of  property,  or  the  taking  away  of  property 
from  one  set  of  members  to  give  to  it  to  another  set.i 

§  133.    When  courts  Avill  not  take  jurisdiction.^ 

In  questions  of  doctrine  or  policy,  a  society  is  the  sole  and 
exclusive  judge.  Courts  of  justice  will  not  entertain  jurisdic- 
tion on  the  merits  of  such  matters.  They  will  not  inquire 
whether  the  decision  or  declaration  of  the  society  upon  the 
subject  of  its  principles  is  in  harmony  with  the  traditions,  cus- 
toms, usages  and  practices  of  the  society,  nor  will  they  examine 
into  the  merits  of  the  decision  of  a  society,  concerning  the 
policy  to  be  adopted  by  it  in  its  internal  government  and 
administration. 

The  courts  take  it  for  granted  that  the  society  is  the  best 
judge  of  such  matters,  and  accept  its  decisions  as  final. 

The  society  being  purely  voluntary,  the  person  who  joins  it 
consents  that  he  will  be  bound  by  the  principles  and  rules  of 
government,  which  it  has  adopted  or  ay  madopt.  Although  he 
may  be  dissatisfied  with  the  action  of  the  society  in  such  mat- 
ters, he  has  no  right  to  appeal  to  the  courts  unless  he  claims 
that  such  action  has  injured  him  in  his  civil  or  property  rights. 

In  case  any  civil  or  property  right  is  affected  by  such  action, 
the  courts  will  inquire  whether  the  society,  under  the  laws  of 
the  State  and  the  provisions  of  its  charter,  had  authority  to 
decide  upon  such  questions  and  to  pass  such  laws,  and  will 
examine  into  the  proceedings  of  the  society  and  determine 
whether  they  are  regular  under  the  rules  prescribed  by  the 
society. 

'  Goodman  v.  Jedidjali  Lodge,  G7  Doaring,  16  N.  Y.  112;  See  "Action 
Md.  117 :  9  Art.  Kep.  13;   Austin  v.     on  Contract  of  Society  "  chapter  XV. 


156  JURISDICTION.  [Chap.  8,  §134. 

It  is  of  the  essence  of  a  voluntary  society  and  of  its  rii^ht  to 
establish  a  tribunal  for  the  decision  of  questions  of  principle 
and  policy  arising  upon  matters  of  internal  government,  that 
its  decisions  should  be  binding  and  final,  subject  only  to  such 
appeals  as  the  society  itself  provides  for. 

This  power  to  decide  upon  such  questions  is,  in  some 
respects,  analogous  to,  and  is  certainly  as  necessary  as,  the 
power  to  pass  by-laws  for  the  government  of  the  society. 

A  court  of  equity  in  this  country  will  not  interpret  the 
organic  laws  of  a  mutual  benefit  society  to  determine  whether 
subordinate  lodges  conform  to  its  tenets,  and  specifically  to 
direct  the  conduct  of  officers  and  agents  in  performing  their 
-duties,  but  will  accept  the  decision  of  the  authorized  tribunals 
of  the  society.  To  interfere  in  such  matters  would  amount  to 
administering  the  internal  affairs  of  such  society.' 

A  court  will  not  inquire  whether  it  is  necessary  to  establish 
other  funds  and  plans  of  insurance  for  the  protection  of  the 
members  and  their  beneficiaries,  in  addition  to  those  already 
established  in  a  society,  nor  will  a  court  restrain  the  officers  of 
a  society  in  the  creation  and  dispensation  of  a  fund  which 
such  society  has,  within  the  proper  objects  of  its  existence, 
provided  for.     These  are  matters  of  internal  regulation.'' 

Nor  will  a  court  interfere  to  control  the  discretion  of  the 
officers  of  a  mutual  benefit  society  in  the  management  of  the 
funds  of  a  society,  as,  for  instance,  to  direct  them  to  pay  a 
death  benefit  from  the  reserve  fund  of  the  society,  instead  of 
by  levying  an  assessment,  when  the  reserve  fund  is  within 
the  limited  amount  which  it  may  carry.  This  is  a  matter  of 
internal  resfulation  and  manao^ement.^ 

§  134.  Injunction  interfering  witli  internal 
management.  A  court  of  equity  is  slow  to  interfere  in 
the  mere  police  courts  of  a  society  incorporated  for  benevolent 
and  charitable  objects,  and  will  not  apply  the  harsh  remedy  of 
injunction,  except  in  cases  clearly  made  out  by  proof,  and 
where  all  other  remedies  are  exhausted.  It  will  not  restrain 
the  officers  of  such  a  society  from  enforcing  its  by-laws,  unless 
they  are  clearly  so  unreasonable  as  to  be  null  and  void." 

§  135.  Injunction  to  restrain  illegal  act  of 
society.     If  the  officers  of  an  incorporated  society  are  about 

'  Stadler  et  nl.  v.  I.  O.  B'nai  B'rith,  Mass. ;  9  N.  E.   Rep.,  753. 
3  Am.  Law  Record.  589.  '  Hussey  et  al.  v.  Gallaher  et  al ,  61 

''  Stadler  v.  I.  O.  B.  B.  supra.  Ga.,  86;  Kerr  on  Injunctions,   Chap. 

^  Grossman  v.  Mass.   Mutual,  etc.,  33,  24,  28. 


Chap.  8,  §137.]  jurisdiction.  157 

to  engage  in  a  method  of  doing  business,  or  an  enterprise,  not 
contemplated  by  the  charter,  or  to  apply  its  funds  or  credit 
to  other  purposes  than  those  speciiied  in  its  charter,  a  court  of 
equity  will  interfere  by  injunction,  at  the  instance  of  any  of 
its  members. 

§  136.  Injunction  to  restrain  society  from  car- 
rying- on  business  upon  erroneous  principles  and 
plans.  In  lieeve  v.  Parkins,  2  Jac.  and  Walker's  liepts.  3U0, 
an  injunction  was  granted  restraining  a  friendly  society  from 
applying  any  of  its  funds  to  the  payment  of  annuities  payable 
according  to  the  rules  and  plan  of  the  society,  when  the 
annuities  chargeable  on  the  funds  have,  in  consequence  of  the 
erroneous  principles  upon  which  the  plan  was  founded,  become 
so  numerous  as  to  be  likely  to  exhaust  the  whole  fund  in  the 
hands  of  the  society.' 

§  137.     Status   of  unincorporated   societies    in 

courts  of  justice.  It  is  exceedingly  dithcult  to  define 
the  status  of  unincorporated  societies  under  the  law.  It  seems 
that  they  were  entirely  unknown  to  the  common  law,  and 
that  their  existence  has  been  recognized  in  the  statutes  of 
very  few  states. 

It  is  generally  assumed  in  the  decisions  of  courts  upon 
(questions  involving  rights  under  such  organizations,  that  they 
must  either  partake  of  the  nature  of  corporations  or  of  part- 
nerships, and  thaty  as  the  law  does  not  incline  to  give  the 
shield  of  the  acts  of  incorporation  to  unincorporated  bodies,, 
they  must  necessarily  be  governed  largely  by  the  rules  which 
govern  in  matters  of  ])artnership. 

It  is  acknowledged  that  an  unincorporated  society  is  sui 
generis,  but  courts  do  not  agree  as  to  the  legal  princi])les 
which  they  will  apply  to  it. 

If  it  1)0  stated  that  such  a  society  must  be  regarded  as  a 
partnership,  it  is  not  dithcult  to  cite  numerous  authorities  as 
sustaining  the  proposition;  but  it  is  equally  easy  to  llnd 
authorities  which  hold  the  contrary  doctrine. 

Many  cases  hold  that,  in  some  of  their  relations,  they  are  to 
be  regarded  as  partnerships,  and  to  be  governed  bv  the  general 
law  of  partnershi])s;  and  that,  in  other  relations,  the  law  of 
corjwrations,  in  absence  of  a  better  rule,  is  to  be  regarded  as 
applicable  to  them. 

'  See  Pearce  v.  Piper,  17  Vesey,  1. 


158  JURISDICTION.  [Chap.  8,  §133. 

Most  cases  hold  that  this  distinction  is  to  be  made  in  cases 
involving  the  rights  of  third  parties  in  their  rehitions  with  the 
society,  or  one  or  more  of  its  members,  on  the  one  hand,  and 
in  cases  involving  the  rights  of  members,  as  between  them- 
selves,  on  the  other  hand. 

The  general  rule  founded  upon  this  distinction  has  been 
laid  down  as  follows: 

"  The  true  principle  is,  and  upon  this  view  the  apparent 
discordance  in  the  cases  may  be  nearly  reconciled,  that  the 
law  allows  associates  to  imitate  the  organization  and  methods 
•of  corporations  so  far  as  their  rights  between  themselves  are 
involved^  and  will  enforce  their  articles  of  agreement  (nothing 
illegal  or  unconscientious  appearing)  as  between  the  parties  to 
them.  But  the  public  and  creditors  have  a  right  to  invoke 
the  application  of  the  law  of  partnership  to  the  dealings  of 
any  trading  association,  unless  such  association  has  the  shield 
-of  incorporation. 

Thus,  if  the  controversy  is  between  members  of  the 
^association,  and  relates  to  such  subjects  as  modes  of  acquiring 
membership,  tenure  of  the  property,  division  of  the  prolits, 
transfer  of  shares,  voting,  expulsion,  dissolution,  or  the  like, 
the  courts  may  deal  with  the  association  by  analogy  to  the  law 
of  corporations,  so  far  as  the  compact  between  the  members 
-contemplates.  But  if  the  question  is  between  the  association 
or  its  members  and  third  parties,  and  relates  to  such  points-  as 
in  what  name  the  association  may  sue,  whether  members  are 
individually  liable  to  the  creditor  for  debts,  etc.,  a  mere  com- 
pact of  association  cannot  vary  the  rights  of  strangers  to  it, 
but  the  associates  must  submit  to  the  general  rules  of  law 
applicable  to  the  questions  raised."  ' 

§  138.  Same  subject  contiimed.  An  association 
for  purposes  of  mutual  benevolence  among  its  members  only, 
such  as  a  lodge  of  Odd  Fellows,  is  not  an  association  for  char- 
itable uses.  If  not  incorporated,  its  members  are  regarded  in 
law  as  partners  in  their  relations  to  third  persons,  and  the 
property  of  the  association  must  be  appropriated  to  pay  the 
debts  of  creditors  who  are  not  members,  before  it  can  be 
applied  toward  payment  of  the  claims  of  its  members.  ^ 

An  unincorporated  society  organized  for  relief  in  sickness, 
etc.,   by  means  of  a  fund  raised  by  subscription  of  the  mem- 

'  Abb.    Dig.    Corp.   title,  Associa-     ing  cases  can  be   reconciled  under 
tions;  There'is  no  doubt  but  that  a    this  distinction, 
large  number  of  seemingly  conflict-        '  Rabb  v.  Reed,  5  Rawle  151. 


Chap.  8,  §139.]  jurisdiction.  159 

bers,  must  be  considered  in  the  nature  of  a  partnership,  and 
in  a  suit  against  the  trustees  by  some  members,  for  an  account, 
alleging  a  dissolution  contrary  to  the  articles,  all  other  mem- 
bers must  be  parties.  ' 

An  unincorporated  voluntary  society  formed  for  mutual 
relief  in  sickness  or  distress,  by  funds  raised  by  initiation 
fees,  hues,  dues,  and  assessments  upon  its  members,  partakes 
of  tlie  nature  of  a  partnership.  '^ 

While  a  member  has  no  severable  interest  in  the  property  of 
such  a  society — and  has  no  interest  which  is  transmissibfe — 
yet  the  rights  of  members  in  this  property,  and  the  modes  of 
enforcing  these  rights,  are  not  materially  different  from  those 
of  i^artners  in  partnership  property.  ^ 

Pritna  facie  the  interest  of  each  member  in  the  propertv  of 
the  society  is  equal  and  proportionate,  but  his  interest  cannot 
be  separated  and  reduced  to  his  possession,  until  the  society  has 
been  dissolved,  and  the  rights  of  all  parties  in  the  property 
have  been  adjusted  and  determined.  His  interest  in,  and  rio-ht 
to  use,  this  property  may  cease  by  refusal  to  comply  witli  the 
contract  of  association,  by  death,  or  by  expulsion  for  improper 
conduct,  and  his  rights,  in  this  regard,  are  far  different  from 
the  rights  of  a  partner  to  partnership  assets. 

In  Lafond  v.  Deems,  81  K.  Y.  508,  the  Supreme  Court  of 
N^ew  York  held  that  the  minority  of  the  members  are  not 
entitled  to  a  decree  of  dissolution  of  the  association  on  grounds 
which  might  be  urged  for  the  dissolution  of  a  partnership; 
that  a  society,  where  there  is  no  power  to  compel  the  payment 
of  dues,  and  where  the  right  of  the  member  ceases  on  his  fail- 
ure to  make  such  payment,  is  not  a  partnership. 

A  mutual  benefit  society  formed  by  several  persons  who 
carry  on  business  substantially  for  the  benefit  of  the  individual 
members  among  themselves,  and  not  for  the  benefit  of  the 
society  as  such,  is  not  to  be  regarded  as  a  partnership.  * 

§  139.   Dissolution  of  aii  uiiiiicoriiorated  society. 

A  court  will  require  a  strong  case  to  be  made  out,  before  "it 
will  dissolve  an  unincor])orated  society,  and  decree  a  sale  of  the 
whole  concern,  but  in  the  dissolution  of  such  an  association,  it 
will  be  governed  by  the  same  principles  which  obtain  in  the 
dissolution  of  partnerships. 

■  Beaumont  v.  Meredith,  3  Ves.  &  511 ;    Reeve    v.    Parkins,  3  Jac.   & 

Beam.  180.  Walker  300. 

-  Gorman  v.  Russell  et  ah,  14  Cal.         "  McMahon    v.    Rauhr,  47  N.  Y 

531 ;    Rabl)  v.  Reed,  5   Rawle   (Pa.)  69. 

158;   Pierce  v.  Piper,  17  Vesey  15;        <  Bear  v.  Bromle}',   11  Eu".  Law 

Ellison  V.  Reynolds,  2  Jac  &  Walker  &  Eq.  414. 


160  JURISDICTION.  [Chap.  8,  §140. 

Not  only  willful  acts  of  bad  faith  and  fraud,  but  gross 
instances  of  carelessness  and  waste  in  the  administration  of 
the  affairs  of  the  association,  as  well  as  exclusion  of  members 
from  their  just  share  in  the  management  and  benefits  of  the 
association,  preventing  the  bus-iness  from  being  conducted  on 
the  stipulated  terms,  are  sufficient  grounds  for  the  dissolution 
of  the  contract  of  association  by  a  court  of  e(|uity.  Though 
the  court  stands  neuter  with  respect  to  occasional  breaches  of 
agreements  between  the  members  of  such  an  association,  which 
are  not  so  grievous  as  to  make  it  impossible  for  the  associa- 
tion to  continue;  yet,  when  it  finds  that  the  acts  complained 
of  are  of  such  a  character  that  relief  cannot  be  given  to  the 
members,  except  by  dissolution,  the  court  will  decree  a  dis- 
solution, even  though  not  specifically  asked. 

When  it  is  insisted  that  the  conduct  of  a  majority  of  the 
members  entitles  the  minority  to  a  dissolution,  the  court  must 
consider  not  merely  the  terms  of  the  express  contract  l)etM-een 
them,  but  also  the  duties  and  obligations  implied  in  every  such 
contract  of  association. 

If  such  an  association  exclude  a  member  from  its  meetings, 
because  he  refuses  to  take  an  oath  to  be  administered  by  the 
president,  which  oath  is  not  required  by  the  constitution  or 
the  by-laws,  and  is  foreign  to  the  objects  of  the  association,  it 
is  ground  for  a  dissolution.' 

§  140.  When  dissolution  of  a  society  will  not 
be"^  decreed.  Courts  should  not,  as  a  general  rule,  interfere 
with  the  contentions  and  quarrels  of  voluntary  associations,  so- 
long  as  the  government  is  fairly  and  honestly  administered." 

Before  a  court  will  decree  a  dissolution  of  a  society,  oppor- 
tunity will  be  given,  where  it  can  properly  be  done,  for  a 
correction  of  the  cause  of  complaint  within  the  society.' 

Where  a  majority  of  the  association  have  mistaken  their 
powers  or  duties,  and  acted  under  such  mistake,  and  are  willing 
to  correct  the  error,  a  court  of  equity  will  not  necessarily  dis- 
solve the  association,  but  may  give  them  an  opportunity  to 
correct  the  mistake.'' 

An  unincorporated  voluntary  society  for  mutual  relief, 
having  excluded  certain  members  from  the  association  because 
of  their  refusal  to  take  an  oath  not  required  by  its  constitu- 
tion or  by-laws  and  foreign  to  the  objects  thereof,  these 
members,  as  plaintiffs,  instituted  a  proceeding  for  the  dissolu- 

'  Gorman  v.   Russel,  14Cal.,  531.        ^  Lafond  v.  Deems,  81  N.  Y.,  508. 
2  Lafond  v.  Deems,  81  N.  Y.,  508.        ^  Gorman  v.  Russell,  14  Cal.,  531. 


Chap.  S,  il^ll.]  jukisdiction.  1P>1 

tion  of  the  society  and  the  distribution  of  its  funds.  The 
supreme  court,  having  decided  on  demurrer  to  the  complaint 
that  the  society  was  a  partnershi]i,  and  would  be  dissolved  by 
a  court  of  equity  for  improperly  excluding  a  member,  remanded 
the  cause  for  further  proceedings. 

The  society  then  rescinded  its  resolution  requiring  an  oath, 
and  filed  an  answer  offering  to  admit  the  plaintiffs  to  all  their 
rights  and  privileges  in  the  society. 

The  Supreme  Court  of  California  held  that  this  action  of  the 
society  sufficed  to  prevent  a  decree  of  dissolution,  and  that  the 
bill  was  properly  dismissed  in  the  court  below.' 

Mere  mistakes,  or  acts  of  misuser,  or  non-user  are  not  enough 
to  warrant  a  judgment  of  ouster  against  an  incorporated 
mutual  benefit  society. 

Such  a  society  cannot  be  dissolved  on  account  of  loss  of 
members,  when  enough  remain  to  supply  vacancies  and  continue 
the  succession.'' 

Notice  of  a  special  meeting  of  a  society,  which  does  not  state 
the  business  to  be  transacted,  does  not  authorize  a  vote  to  dis- 
solve the  association  and  dispose  of  its  property.' 

§  141.  Same  subject  coiitiiiued.  A  voluntary 
association  instituted  for  moral,  benevolent  and  social  objects 
should  not  be  dissolved  by  the  courts  for  slight  causes;  and,  if 
at  all,  only  when  it  is  entirely  apparent  that  the  organization 
has  ceased  to  answer  the  ends  of  its  existence,  and  no  other 
mode  of  relief  is  attainable. 

The  parties  to  a  proceeding  were  members  of  an  unincor- 
porated association  for  moral  improvement,  reKef  in  sickness, 
and  in  case  of  death.  In  an  action  brought  to  dissolve  the 
association,  it  was  urged  that  the  association  was  divided  into 
factions;  that  the  feelings  of  hostility  between  the  members 
were  such  as  to  render  it  impossible  for  them  to  agree  as  to 
the  transaction  of  its  business  and  the  care  of  its  funds,  and 
that  the  usefulness  of  the  association  had  departed. 

By  the  constitution  and  by-laws  of  the  association  provision 
was  made  for  redress  of  grievances,  aiul  for  the  ])unisliment  of 
parties  offending,  aiul  it  was  within  the  })owor  of  the  associa- 
tion to  supi)ress  conduct  of  tlie  kind  complained  of.  An 
appeal  was  authorized  to  a  higher  tribunal.  No  com])laint 
before  the  association  had  been  made  ay-ainst  the  members 

1  Gormiin  v.  Russell,  IS  Cal  ,  688.        ^  St.  Marv's  Beii.  Ass'u  v.  Lynch 
-  State   V.    Socictc     Republicaiue     N.  II.  9  Atl'.  Rep.,  98. 
etc  ,  9  Mo.,  App  ,  114. 

11 


162  JURISDICTION.  [Chap.  8,  §141. 

charged  by  plaintiffs  with  a  violation  of  the  rules.  The 
by-laws  provided  that  the  association  should  not  be  dissolved, 
save  by  unanimous  vote,  and  that  no  motion  to  dissolve  should 
be  entertained  so  long  as  ten  members  remained  in  good 
standing. 

The  court  held  that  the  action  was  not  maintainable;  that 
plaintiffs  were  at  least  required  in  the  lirst  instance  to  resort 
to  the  remedies  provided  by  the  rules  of  the  association,  befoi'e 
seeking  the  interposition  of  a  court  of  equity.' 

In  the  same  proceeding  it  was  urged,  as  a  further  ground 
for  the  dissolution  of  the  association,  that  it  had  hired  more 
room  than  was  necessary  for  their  meetings;  that  it  had  fitted 
up,  furnished  and  sublet  the  portion  it  did  not  require,  and 
rented  its  own  room  when  not  in  use,  and  that  it  had  from 
these  rents  accumulated  a  large  fund ;  but  the  court  held  that 
the  association  in  such  matters  might  exercise  a  reasonable 
discretion  and  where  the  renting  of  rooms  was  merely  inci- 
dental to  its  primary  object,  and  the  rents  received  were  the 
result  of  accident  and  good  management,  in  the  exercise  of  a 
proper  discretion,  having  in  view  merely  the  accommodation 
and  prosperity  of  the  association,  there  was  no  such  accumu- 
lation of  funds  as  would  call  for  the  dissolution  of  the  associ- 
ation on  that  ground. 

In  cases  of  violent  dissensions  and  irreconcilable  differences 
between  the  meml)ers  of  a  voluntary  association,  judgment 
will  be  rendered  at  the  suit  of  one  or  more  members  against 
all  the  others,  dissolving  the  society;  but  no  action  will  be 
entertained  for  such  a  purpose  upon  mere  proof  of  differences 
of  opinion,  bad  temper,  the  ordinary  disputes  common  to  such 
societies,  nor  upon  proof  of  injuries  or  injustice  sustained  by 
one  member,  through  the  vote  or  action  of  the  society,  if  he 
have  another  remedy."^ 

Where  the  constitution  of  a  society  provides  that  it  shall 
not  be  dissolved  so  long  as  a  certain  number  of  members 
desire  its  continuance,  such  provision  is  controlling  in  an 
action  to  obtain  a  decree  of  dissolution,  and  if  that  number  of 
members  oppose  a  dissolution  when  the  vote  is  put  in  the 
society,  or,  if  there  be  no  vote,  when  the  action  is  commenced, 
dissolution  will  not  be  decreed.' 

'  La  Fond  et  al.  v.  Deems  et  nl.  81  Pr.  87 ;  La  Fond  et  al.  v.  Dpems  et  al. 
N.  Y.  508.  81  N.  Y.  508;  St.  Mary's  Ben.  Ass'n 

"Fischer  v.  Raab  et  al,  57  How.  v.  Lynch,  N.  H.;  9  Atl.  Rep.  98. 
Pr  87. 

^  Fischer  v.  Raab  et  al.  57   How. 


<ChAP.  8,  §142.]  JURISDICTION.  163 

§  143.    Dissolution  of  an  incorporated  society. 

Whether  a  corporation  which  is  shown,  upon  a  quo  warranto 
proceeding,  to  have  misused  or  abused  its  franchises,  should 
be  ousted  of  its  corporate  franchises,  is  a  question  not  capable 
of  determination  by  any  fixed  rule  or  test,  but  rests  in  the 
sound  discretion  of  the  court,  in  the  light  of  all  the  circum- 
stances of  the  case  before  it. 

Where  trustees  of  a  society  had  operated  it  for  their  own 
profit,  and  had  misused  and  abused  its  franchise,  the  Supreme 
Court  of  Ohio,  said:  "  The  present  membership  of  the  defend- 
ant, numbers  about  thirty-five  hundred,  chiefly  worthy  and 
deserving  people,  utterly  innocent,  if  not  wholly  ignorant  of 
any  misuse  or  abuse  of  its  franchises.  Purged  of  the  unfor- 
tunate features  of  its  management  which  this  trial  has 
developed,  this  association  is  capable  of  much  usefulness.  To 
visit  the  perversion  of  its  objects  by  a  few,  upon  the  heads  of 
the  entire  membership  must  result  in  irremediable  hardship; 
and  without  stating  more  fully  the  grounds  of  our  action,  or 
the  considerations  which  move  us,  it  must  serve  our  present 
purpose  to  say  that  the  relators'  prayer  that  the  defendant 
be  ousted  of  its  franchise  to  be  a  corporation  is  refused. 
Judgment  will  be  entered,  however,  ousting  it  of  the  use  of 
its  franchises  for  the  profit  of  its  trustees.' 

An  incorporated  society  organized  under  an  original  act, 
against  which  an  information  in  the  nature  of  a  quo  war- 
ranto was  pending  at  the  time  of  the  passage  of  the  amenda- 
tory act,  is  entitled,  in  such  suits,  to  the  benefit  of  the  amend- 
ment." 

As  the  contract  of  insurance  in  a  mutual  benefit  society  is 
a  personal  contract  l)etween  the  society  and  the  member,  it 
follows  that,  unless  the  society  is  permitted  by  the  express 
provisions  of  the  law  governing  its  organization  to  admit 
infants  into  its  membership,  a  contract  between  the  society  and  a 
person  who  has  not  attained  the  age  of  majority,  is  one  into 
which  the  society  may  not  enter. 

Infants  were  incapacitated  by  the  common  law  from  enter- 
ing into  contracts,  and  there  is  nothing  in  the  contract  of 
mutual  benefit  insurance,  which  will  permit  a  society  to  disre- 
gard an  established  rule  of  the  common  law.  And  where  a 
society  provides  in  its  by-laws  that  contracts  may  be  entered 
into  by  it  with  persons  who  are  not  of  lawful  age,  and  where 

'  State  ex  rel.  v.  Peoples'  etc.,  •  State  v.  Mutual  Protection  Asso- 
Ass'n.,  42  Ohio  St.  579  ciation,  26  Ohio  St.  19. 


-~f 


164  JURISDICTION.  [Chap.  8,  §143.. 

the  society  issues  certificates  of  membership  to  minors,  in  the 
regular  course  of  business,  it  may  be  dissolved. 

Where  the  statute  under  which  a  society  is  incorporated 
provides  that  no  part  of  the  funds  collected  for  the  payment 
of  death  benefits  shall  be  applied  to  any  other  pur])ose,  it  i& 
unlawful,  and  a  ground  of  dissolution,  for  the  society  to  use,, 
in  the  payment  of  running  expenses,  any  part  of  the  fund 
acquired  from  mortuary  assessments. 

In  quo  warranto  against  an  incorporated  society,  where  it 
has  assumed  franchises  not  granted,  and  it  appears  that  the 
certificate  of  incorporation  does  not  comply  with  the  require- 
ments of  the  statute  under  which  it  is  organized,  the  court,  in 
the  exercise  of  its  discretion,  will  oust  it  of  the  franchise  to  be- 
a  corporation.' 

§  143.  Wlieii  society  is  dissolved  by  its  own  act 
or  neglect.  A  chapter  of  Free  Masons,  in  1S36,  disposed  of 
all  their  real  and  personal  property,  consisting  of  their  hall,, 
furniture  and  equipment,  pursuant  to  a  vote  of  the  chapter, 
and  for  twenty-three  years  held  no  meetings,  elected  no  offi- 
cers, performed  no  acts  required  by  its  by-laws  and  rules,  and- 
ceased  to  have  any  visible  sign  of  existence;  it  was  held  that 
the  legal  existence  of  the  chapter  was  gone,  and  that  it  was 
beyond  the  power  of  the  state  chapter  to  restore  it  to  life  so  as 
to  preserve  for  it  a  continued  existence  from  1836. 

A  rule  of  the  society  that  the  officers  should  hold  their 
offices  until  their  successors  were  elected,  could  not,  in  such  a 
case  as  above  stated,  operate  to  preserve  its  legal  exis- 
tence.' 

A  legal  surrender  of  the  corporate  franchise  of  a  mutual 
benefit  society  will  not  be  presumed  from  non-user,  nor  from 
failure  to  collect  dues,  or  to  hold  meetings,  for  six  months,  or 
any  short  period  of  time.^ 

A  society,  the  members  of  which  must  be  elected  by  the  vote 
of  existing  members,  is  dissolved  by  the  death  of  all  the  mem- 
bers, whether  such  society  be  incorporated  or  unincor- 
porated.^ 

The  grand  lodge  of  a  society  cannot  make  new  regulations 
subversive  of  fundamental  principles  and  land  marks  of  the 
order,  without  the  clear  consent  of  the  subordinate   lodges; 

'  State  V.  Central  Ohio  Mutual  Re-  ^  State    v.    Societe    Republicaine- 

lief  Association,  29  Oh.  St.  399.  etc.,  9  Mo.  App.  114. 

^Strickland  e<  a?.  V.  Pritcharde^ a ^.  "Morawetz    on    Corp."  at    section 

37  Vt.  334.  1009. 


Chap.  8,  §143. J  jurisdiction.  165 

nor  can  the  officers  of  a  corporation  composed  of  several  integral 
parts,  dissolve  the  corporation,  without  the  full  assent  of  the 
great  body  of  the  society. 

Tlie  dereliction  of  the  charter  by  the  heads  of  the  corpora- 
tion does  not  dissolve  the  corporate  body,  especially  if  the 
remaining  members  have  the  power  of  renovating  the  head.' 

•  Smith  V.  Smith,  3  Desau.  (S.   C.)  ■ 
557 ;  See  State  v.   Societe   Republi- 
-caine  etc.,  9  Mo.  App.  114. 


166  JURISDICTION.  [Chap.  8,  §144, 


Jurisdiction  of  Courts  over  Societies.    Part  II. 


Sec.  144.  )  Dissolution,  trust  funds — distribution  of  property  on 
Sec.  146.  \      dissolution. 

Iec   149  \  ^^^^^  ^^^^^  ^^^  trustees. 

Sec.  150.     Rights  of  contributors  to  funds  of  society. 

Sfc    151   ) 

^  r   1 52'  C  I^iS^t^  '^^  members  in  property  and  funds  of  society. 

Sec,  153.     Revocation  of  charter  granted  by  the  state. 

§  144.  Dissolution,  trust  funds — distribution 
of  property  on  dissolution.  The  dissolution  of  a  volun- 
tary society  cannot  l)e  prevented.  It  is  in  the  power  of  any 
association,  whether  incorporated  or  not,  except  such  as  are 
created  for  the  administration  of  political  or  municipal  author- 
ity, to  dissolve  itself  by  its  own  assent.  This  has  been  repeat- 
edly adjudged. 

But  it  by  no  means  follows  that  the  members  of  a  society, 
holding  funds  in  trust,  or  of  a  body  incorporated  for  eleemosy- 
nary purposes,  can,  on  such  dissolution,  appropriate  its  funds 
among  themselves.  Mere  monied  corporations,  whose  funds 
are  owned  solely  by  the  stockholders,  and  are  not  held  in  any 
manner  for  charitable  or  public  use,  may  do  this,  but  no 
others. 

The  society  may  be  dissolved,  but  the  trust  fund  is  not, 
therefore,  to  be  either  distributed  or  abandoned.  It  is  an 
established  maxim  in  equity  that  no  trust  shall  fail  for  want 
of  a  proper  trustee.  Such  fund  may  be  saved  to  carry  out  the 
original  purposes  and  wishes  of  the  donors  or  contributors. 

Where  the  funds  of  a  Masonic  lodge  have  accumulated 
under  a  by-law  that  they  shall  be  appropriated  "  for  the  good 
of  the  craft,  or  the  relief  of  indigent  and  distressed  worthy- 
masons,  their  widows  and  orphans,"  these  funds  are  in  the- 
hands  of  the  acting  members  for  a  charitable  use,  and  a  disso- 
lution of  the  lodge  and  a  division  of  the  funds  among  the  act- 
ing members  for  their  private  use,  is  a  violation  of  the  trust 
on  which  the  fund  was  raised.  ' 

In  1870,  a  subordinate  charitable  society  was  incorporated, 
chartered  and  organized  under  the  powers  and  regulations  of 

1  Duke  V.  Fuller,  9  N.  H.  536. 


CiiAr.  8,  p45.]  JURISDICTION.  167 

the  general  council  of  the  association.  One  of  the  provisions 
of  its  charter  was  that,  if  it  should  dissolve,  its  charitable  funds 
should  be  paid  over  to  the  general  council,  and  be  held  and 
disbursed  by  the  latter,  according  to  its  rules.  These  rules 
provided  for  holding  the  funds  by  that  council  in  trust  for  the 
purposes  to  which  the  widows'  and  orphans'  fund  was  devoted 
originally,  and  for  refunding  them  if  the  subordinate  council 
should  reorganize. 

In  1881,  the  subordinate  council  voluntarily  disbanded, 
surrendered  its  charter  to  the  general  council,  and  under  a  reso- 
lution, divided  all  its  charitable  funds  among  its  members  then 
in  good  standing. 

The  court  held  that  it  had  jurisdiction  to  compel  those 
participating  in  the  division  to  refund  to  the  general  council 
the  money  so  received  by  them.  ' 

Although  a  court  of  equity  may  not  decree  a  dissolution  of 
an  incorporated  society  unless  tiiat  power  be  expressly  conferred 
by  statute,  yet,  in  virtue  of  its  general  jurisdiction  over  trusts, 
it  has  jurisdiction  to  grant  relief  against  an  incorporated  soci- 
ety upon  the  same  terms  as  against  an  individual  under  simi- 
lar circumstances,  and  it  will  interfere  to  prevent  an  actual  or 
threatened  misapplication  of  its  funds. 

§  145.       Same    subject    continued.     It    may    be 

stated,  upon  both  principle  and  authority,  that  when  a  cor- 
])oration  is  virtually  dead,  although  its  term  of  existence  limited 
by  law  has  not  expired,  and  it  has  property  or  assets,  which 
cannot  be  used  in  carrying  out  the  purposes  of  the  corporation, 
remaining  in  its  hands,  courts  have  jurisdiction  to  distribute 
such  property  and  assets  among  its  members  upon  such  a  basis 
as  shall  be  just  and  equitable. 

Where  the  functions  of  a  corporation  have  ceased,  the 
managers  of  that  corporation  are  bound  to  account  for  all 
moneys  belonging  to  the  corporation,  and  when  such  moneys 
are  improperly  retained,  a  court  of  justice  will  make  a  decree, 
in  order  that  they  may  be  divided  among  the  various  members. 

A  mutual  benelit  society  which  has  created  an  endowment 
fund,  cannot,  on  being  refused  a  license  by  the  state  in  which 
it  was  incorporated,  and  thus  being  compelled  to  cease  business, 
organize  a  new  com])any,  and,  against  the  protest  of  parties 
insured,  use  such  endowment  fund  to  ol)tain  reinsurance  of  the 
old  members  in  the  new  society;  and  the  members  insured,  in 

'  State  Council   O.    U.   A.    M.   v. 
Sharp  et  al,  38  N.  J.  Eq,  24. 


168  .TURiSDiCTioN,  [Chap.  8,  ^145. 

such  case,  may  proceed  in  a  court  of  equity  to  wind  up  the 
affairs  of  the  oki  society  and  compel  the  distribution  of  sucli 
fund  among  those  for  whose  benefit  it  was  created.' 

A  mutual  benefit  society  organized  to  pay  monthly  to  the 
widows  of  members  a  sum  of  money,  which  has  the  right  to 
dissolve  at  any  time  on  the  votes  of  a  certain  number  of  mem- 
bers, if  so  dissolved,  cannot  be  administered  by  a  court  of 
equity  in  perpetuity,  by  the  continued  collection  of  dues,  but 
the  funds  in  the  treasury  must  be  distributed,  and  the  society 
"wound  up.'^ 

A  mutual  benefit  society,  the  dues  of  which  were  to  be  used 
to  pay  to  the  widows  of  members  fifteen  dollars  per  month 
during  widowhood  and  good  deportment,  in  the  judgment  of 
the  directors,  being  dissolved,  the  fund  in  the  treasury  at  the 
time  of  the  dissolution  was  ordered  to  be  distributed  as 
follows:  The  valued  annuity,  by  annuity  tables,  of  each 
widow's  life,  at  the  date  of  dissolution,  at  the  rate  of  fifteen 
dollars  per  month,  must  be  first  ascertained,  without  taking 
into  consideration  the  possibility  of  her  marrying  again,  or  not 
properly  conducting  herself,  and  the  fund,  if  insufficient,  paid 
fro  rata^  and  if  sufficient  to  pay  the  annuities  in  full,  the 
remainder  to  be  divided  equally  among  the  members  surviving 
at  the  date  of  dissolution.  The  widows  of  those  dying  since 
dissolution  were  not  to  have  their  annuity  value  reckoned  and 
allowed,  but  were  required  to  work  out  their  rights  through 
the  estates  of  their  deceased  husbands.  The  rights  of  a  widow 
who  remarried  prior  to  distribution  ceased  on  such  remarriage, 
though  she  again  became  a  widow,  for  she  is  then  the  widow 
of  the  last,  and  not  of  the  first  husband.  Where,  by  reason  of 
the  surviving  members  not  being  made  parties,  no  final  dis- 
tribution was  made,  and  by  reason  of  some  of  the  widows  who 
were  made  parties  being  in  default  for  answer,  another  widow 
receives,  under  decree  of  court,  more  than  the  present  value  of 
her  annuity,  she  is  not  to  be  compelled  to  repay  the  excess,  on 
the  stockholders  being  made  parties,  and  the  other  widows 
then  insisting  on  their  rio^hts. 

Where,  by  investment  of  the  fund  after  dissolution  and 
before  final  distribution,  it  has  increased,  each  widow  is 
entitled  to  the  portion  of  the  net  accumulations  produced  by 
the  investment  of  the  amount  due  her  on  her  annuity  value. ^ 

'  Stamm  et  al.  v.  N.  W.  Mut.  Ben.  Benevolent  Ass'n.,  1  Cin.  Law  Bull., 
Ass'n.,  Mich.  32  N.  W.  Rep.  710.  18. 

-  Collier  v.   Steamboat    Captains'        ^  Collier  v.  Association,  supra. 


OhAP.  8,  §146.]  JURISDICTION.  169 

§  146.  Same  subject  continued.  The  minority  of 
the  members  of  a  lodge  being  outvoted  upon  the  disposition 
of  funds,  brought  an  action  against  its  trustees,  charging  them 
with  an  intention  to  divert  the  funds,  and,  by  concealing  the 
fact  of  the  vote,  obtained,  an  injunction  and  the  appointment 
of  a  receiver,  which  action  the  court  revoked  upon  full  infor- 
mation. Subsequently  the  district  grand  lodge,  at  the  insti- 
gation of  the  minority  of  the  lodge,  revoked  the  charter  of 
the  lodge  referred  t<^,  and  there^upon  the  minority  filed  a  bill 
in  their  individual  names  for  a  pro})ortion  of  the  funds,  alleg- 
ing that  the  lodge  had  ceased  to  exist  "through  no  fault  of 
theirs." 

The  court  held  that  the 'conduct  of  plaintiffs,  who  had  vol- 
untarily seceded  from  the  lodge,  and  formed  a  separate  lodge 
under  authority  of  the  district  grand  lodge,  was  so  unfair 
and  inequital)le  as  to  preclude  them  from  relief. 

Courts  will  never  recognize  as  valid  any  rule  or  law  of  a 
mutual  benefit  society,  the  effect  of  which  is  to  confiscate  pro- 
perty, or  arbitrarily  take  away  ]>roperty  rights  from  one  set  of 
members  and  give  them  to  another  set. 

Where  a  minority  of  the  members  claim  title  to  property 
of  the  society  under  an  arbitrary  forfeiture  of  the  charter  of  a 
subordinate  lodge  by  the  supreme  lodge  of  the  society,  they 
cannot  recover.' 

The  facts  in  this  case  showed  that  the  trustees  had  appro- 
priated from  nine  to  ten  thousand  dollars  of  the  funds  of  the  old 
society,  amounting  to  about  fifty  thousand  dollars,  and  had  j>aid 
the  same  to  the  new  society  for  reinsurance  of  members  who 
had  insured  in  the  new  company,  and  accepted  a  cancellation 
of  their  certificates  of  membership  in  the  old  society.  The 
court  says: 

"These  facts  show  the  necessity  for  the  interposition  of  a 
court  of  equity  to  prevent  a  further  misapplication  of  the 
fnnds  of  the  old  association,  and  to  decree  an  equitable  distri- 
bution thereof.  Otherwise,  what  is  to  become  of  this  large 
accumulation  of  money  now  in  the  hands  of  the  trustees? 
The  new  association  is  not  entitled  to  it.  The  trustees  have 
no  right  to  appropriate  it.  It  cannot  be  used  in  carrying  out 
the  purposes  for  which  it  was  created.  There  is  no  equity  in 
applying  it  to  the  payment  of  death  losses  in  full,  as  they 
occur,  for,  aside  from  there  being  no  contract  to  that  effect, 

'  Goodman  v.  Jedidjah   Lodge,  67 
Md.  117;  9  Alt.  Rep.  13. 


170  JURISDICTION.  [Chap.  8,  §147. 

it  would,  in  the  natural  course  of  events,  be  exhausted  long 
before  membership  in  the  association  would  be  terminated  by 
death,  and  the  surviving  members  would  receive  notliing." 

A  voluntary  association  of  individuals  who  have  contributed 
funds  for  a  public  purpose  will  be  regarded  as  a  charity,  and  a 
court  of  equity  has  jurisdiction  over  the  parties. 

Funds  supplied  from  private  giftsfor  legal,  general  or  public 
purposes,  are  charitable  funds,  to  beadininistered  by  a  court  of 
equity.  An  unincorporated  fire-engine  or  hose  company  is 
not  a  partnership  as  between  its  members,  whatever  may  be 
its  relations  to  third  persons. 

Where  the  association  is  for  private  and  individual  proiit 
or  pleasure,  with  no  public  object,  it  is  treated  as  a  copartner- 
ship. So,  where  the  association  is  for  private  emolument,  or 
for  benevolence,  confined  exclusively  to  the  members,  and  in 
which  none  others  participate,  as  between  themselves  they  are 
partners.  But  a  private  unincorporated  association  for  general 
purposes  of  public  utility,  a  court  of  equity  will  not  treat  as  a 
partnership,  nor  declare  its  dissolution  and  divide  its  assets 
among  the  members  composing  it. 

Property  given  to  such  an  association  is  pledged  to  the 
objects  for  which  it  was  intended  to  be  applied  by  the  succes- 
sive contributors,  and  cannot  be  diverted  from  them,  while 
those  remain  who  are  ready  and  willing  to  execute  the  public 
trust  with  which  it  has  been  clothed.  A  court  of  equity  will 
not  suffer  its  funds  to  be  diverted  to  other  uses  than  the 
donors  intended.' 

In  private  unincorporated  associations  of  individuals  for 
public  purposes,  the  majority  cannot  bind  the  minority  in  the 
disposition  and  management  of  its  funds,  unless  by  special 
agreement.^ 

§  147.  Trust  funds,  trustees.  It  has  been  held  that 
money  contributed  by  the  members  of  a  society  to  a  common 
fund,  to  be  applied  to  the  relief  and  assistance  of  its  members, 
when  in  sickness,  want  of  employment,  or  other  disability,  is 
not  a  charitable  fund  to  be  controlled  by  a  court  of  equity.^ 

There  is,  however,  a  distinction  between  a  fund  contributed 
by  the  members  of  a  society,  to  be  employed  and  disposed  of 
among  themselves,  as  they  may  agree,  and  a  gift  conferred  as 

'  Thomas  V.  Ellmaker,  1  Par.  Sel.  Sel.  Cases  (Pa.)  98;  Livinsrstou  v- 
Cases  (Pa.)  98.  Lynch,  4  Johnson's  Ch.  (N.  Y.)    573- 

^  Thomas    v.     Ellmaker,  1    Par.        ^  Rabb  v.  Reed,  5  Rawle  151. 


Chap.  8,  §147.]  jurisdiction.  171 

a  matter  of  bounty  upon  such  society,  in  trust  to  be  distributed 
in   charity. 

Where  the  fund  belongs  to  the  first  class,  courts  of  equity 
will  not,  as  a  general  rule,  interfere  with  the  mere  adminis- 
tration of  the  fund,  for  this  would  he  a  virtual  administration 
of  the  internal  affairs  of  the  society.  In  such  a  case,  to  autho- 
rize the  court  to  interfere,  it  must  be  shown  that  the  fund  i& 
distinctly  impressed  w^ith  the  qualities  of  a  trust,  and  that  the 
trust  has  been,  or  is  about  to  be  violated  by  a  misapplication 
of  the  fund. 

Whether  a  fund  formed  by  the  contributions  of  the  mem- 
bers of  a  society  has  been  impressed  with  a  trust  and  so 
accepted,  is  a  question  of  fact  always  open  to  judicial  inquiry, 
and  whether  the  alleged  trustee  be  an  individual,  or  a  collective 
body  of  individuals,  incorporated  or  otherwise,  no  act,  declar- 
ation, or  decision  of  such  trustee  will  prevent  such  in<|uiry. 
If  the  terms  of  the  alleged  trust  are  contained  in  an  instru- 
ment of  gift,  that  instrument  will  be  examined  and  the  inten- 
tions of  the  donor  carried  into  execution.  If  expressed  in  the 
articles  of  association  of  a  voluntary  society,  these  articles  will 
be  carried  into  specific  execution  for  the  purpose  of  enforcing 
the  trust;  and  if  in  the  fundamental  law,  or  in  the  ordinances 
and  by-laws  of  a  society,  on  the  faith  of  which  contributions 
have  been  made,  the  court  will  adopt  the  construction  of  the 
members,  and  apply  relief  according  to  their  ow^n  views  of  the 
law. 

An  ordinance  of  a  society,  which  provides  for  the  creation 
of  a  fund  for  the  benefit  of  the  widows,  orphans,  heirs,  or 
designated  beneficiaries  of  the  members,  and  commits  the 
administration  of  such  fund  to  the  officers  of  the  society, 
impresses  any  money  paid  into  such  fund  with  the  qualities  of 
a  trust  for  the  s])ecial  purposes  expressed  therein;  and  the 
fund  thus  formed  can  properly  be  applied  only  in  that  partic- 
ular manner  ])ointed  out  in  such  ordiuance,  which,  in  this 
regard,  is  to  be  treated  as  an  express  declaration  of  trust. 

Where  funds  have  been  contributed  by  members  of  a  society, 
under  its  by-laws,  for  the  exclusive  benefit  of  its  own  members 
when  in  sickness  and  distress,  and  have  accumulated  in  the 
treasury,  such  by-laws  will  be  treated  as  declarations  of  trust, 
and  a  court  of  equity  will  not  ]ieruiit  such  accumulations  to 
be  diverted  from  the  s])ecified  ol)jects. 

And  funds  collected  by  the  separate  lodges  of  a  mutual 
benefit   society   from  their  own  members,  for  the  exclusive 


172  JURISDICTION.  [Chap.  8,  §148. 

benefit  of  the  members  of  each,  are  held  in  trust  for  the 
special  purposes  expressed  in  their  by-laws  and  ordinances, 
which  are  to  be  treated  as  express  declarations  of  trust,  and 
the  appropriation  of  any  part  of  such  funds  to  a  new  purpose, 
by  order  of  a  representative  body  governing  the  subordinate 
lodges,  is  a  misappropriation  which  a  court  of  equity  will 
restrain,  on  application  of  members  of  such  lodges  .i 

§  148.    Trust  funds  and  trustees  continued.    The 

funds  of  a  society  were  kept  on  deposit  in  bank,  subject  to  the 
order  of  the  trustees.  One  of  the  by-laws  of  the  society  pro- 
vided that  the  trustees  should  "keep  the  funds  invested,  for 
the  best  interests  of  this  tribe,  in  such  stocks,  bonds,  mortgages, 
or  other  securities  as  shall  be  approved  by  two-thirds  of  the 
members  thereof  present  at  a  regular  council." 

An  order  was  passed  by  the  tribe  or  society,  instructing  the 
trustees  "to  try  and  invest  the  money  in  the  bank,  not  exceed- 
ing $2,000."  Such  an  order  does  not  purport  to  authorize  an 
investment  of  money  of  the  tribe  otherwise  than  "  in  stocks, 
bonds,  mortgages,  or  other  securities,  approv^ed  by  two-thirds 
of  tlie  members  thereof  present  at  a  regular  council  " — ,  and 
an  investment  of  any  of  such  funds  by  the  trustees  in  real 
estate  bought  of  a  member  of  such  tribe  or  society,  is  voidable 
at  the  election  of  the  society. 

In  an  action  against  the  trustees  and  the  vendor  to  have  such  a 
purchase  declared  void,  evidence  that  one  of  the  trustees  under- 
stood that  the  propriety  of  the  purchase  was  first  to  be  sub- 
mitted to  the  society,  is  admissible;  and  evidence  that  one  of 
the  trustees  acted  without  the  concurrence  of  a  co -trustee,  or 
that  the  latter  w^as  induced  to  concur  in  his  act  by  reason  of 
misrepresentations  which  he  had  made  with  respect  to  the 
concurrence  of  a  third  trustee,  is  also  admissible.  In  such  an 
action  the  question  whether  the  acts  of  the  officer  were  fair  or 
unfair  is  to  be  determined  by  the  jury,  and  not  bj^tlie  trustees 
who  may  be  called  as  witnesses. 

Where  a  mortgage  made  by  the  vendor  has  been  paid  off 
and  cancelled  with  funds  derived  from  a  fraudulent  sale  of 
property  to  the  society,  and  suit  is  brought  to  set  aside  such 
sale,  the  vendor  and  mortgagee  being  ]>arties,  the  mortgage 
may  be  revived  and  enforced  for  the  benetit  of  the  society 
against  all  the  property  therein  described,  to  the  extent  of  the 

'  Stadler  v.  District  Grand  Lodge 
I.  O.  B.  B.  3  Am.  Law  Record,  589. 


Chap.  8,  §149.]  jukisdiction.  173 

amount  applied  by  the  vendor  to  its  satisfaction,  from  the 
proceeds  of  such  fraudulent  sale.' 

A  member  of  a  society,  who  is  elected  its  treasurer  ta 
receive  and  invest  the  funds  of  the  society  in  his  individual 
name,  and  who  does  so  invest  them,  holds  the  funds  as  a  trustee 
for  the  society,  and  is  subject,  as  such  trustee,  to  the  jurisdic- 
tion of  a  court  of  equity." 

J!^either  the  society  nor  its  officers  can  appropriate  its  funds 
to  other  purposes  than  those  for  which  they  were  intended,  and 
a  court  of  equity  will  interfere  to  prevent  a  wrongful  disposi- 
tion of  them.' 

§  149.     Trust   funds    and   trustees     continued. 

Where  trustees  of  a  lodge,  who  had  executed  their  notes  for  its 
debts,  made  a  honajide  sale  of  its  property  to  a  stranger  in 
consideration  of  his  agreement  to  pay  such  notes,  they  might 
thereafter,  as  individuals,  repurchase  said  property  from  such 
purchaser,  and  the  mere  fact  that  they  did  so,  without  any 
consideration  other  than  their  agreement  to  pay  the  notes 
assumed  by  the  purchaser,  did  not  render  such  sale  fraudulent 
and  void  as  to  the  creditors  of  the  lodge.' 

Zealous  as  courts  of  ecjuity  are,  in  watching  the  conduct  of  a 
trustee  in  connection  with  the  objects  of  his  trust,  he  is  only 
forbidden  by  them  from  dealing  with  the  trust  property  for 
his  own  benefit,  so  long  as  the  trust  continues.  The  moment 
it  ceases,  he  occupies  precisely  the  same  relation  to  it  that 
strangers  to  the  trust  do,  and,  acting  in  good  faith,  he  may 
become  the  owner  by  purchase  or  otherwise.^ 

The  fact  that  an  unincorporated  societ}^  not  a  charity,  is 
subject  to  the  sole  government  and  control  of  a  superior  bodv, 
does  not  deprive  courts  of  their  jurisdiction  to  compel  certain 
trustees  of  the  society,  removable  at  its  ])leasure,  to  transfer 
the  trust  estate  to  new  trustees  duly  chosen  by  it." 

A  bill  in  equity  stated  that  the  ])laintitt's  and  many  others 
had  formed  a  voluntary  association  for  benevolent  purposes,  that 
the  name  of  the  association  was  afterward  changed  by  vote  of 
its  members  at  a  regular  meeting,  that  the  funds  of  the  asso- 
ciation were  deposited  for  its  use  in  the  names  of  its  four 
trustees  in  a  savings  bank,  that  one  of  its  trustees  had  refused 

'  lied  Jacket  Tribe,  I.  O.  R.  M-  v.  ■•  Miller  v.  Lebanon  Lodge,  88  Ind. 

Gibson  et  al,  70  Cal.  128.  280. 

■'Weld   V.    May,  9   Cash.   (Mass.)  *  Munn    v.     Bumess,  70   111.604; 

181.  Busli  V.  Sherman.  80  111.  160. 

aPenfield  V.  Skinner,  11   Vt    296;  "•  Byowh  et  al.    v.   Grilfeu  e«  ai.,  U 

Bailey  v.  Lewis,  3  Day  (Conn.)  450.  Weekly  Notes  of  Cases.  358. 


174  JURISDICTION.  [Chap.  8,  §150. 

to  join  with  his  co-trustees  in  an  assignment  of  tliose  funds  to 
their  successors,  and  that  the  bank  had  refused  to  transfer  the 
funds  without  such  an  assignment;  it  prayed  that  the  savings 
bank  might  be  ordered  to  transfer  the  funds,  and  that  the 
trustee  might  be  ordered  to  join  in  the  assignment.  The  court 
lield  that  plaintiffs  and  their  associates  might  maintain  the 
bilk' 

§  150.  Rights  of  contributors  to  funds  of 
society.  The  contributors  to  a  fund  raised  and  placed  in 
the  hands  of  trustees  for  a  specific  purpose,  have  a  right  to 
have  repaid  to  them,  in  proportion  to  their  contributions,  any 
surplus  not  needed  for  the  object.  The  claim  is  founded  in 
•equity,  and  will  be  enforced  in  the  courts. 

This  fund  is  in  the  control  of  the  society,  only  for  the  pur- 
pose for  which  it  M'as  raised.  It  may  be  disposed  of  for  any 
purpose  within  the  object  for  which  it  was  contributed,  at  any 
regular  meeting  of  the  society,  by  the  voice  of  the  majority  of 
the  members  present,  even  if  a  minority  of  the  whole  number. 
But  the  vote  must  be  for  some  purpose  for  which  the  money 
was  contributed.  A  majority  cannot  dev^ote  the  money  o^ 
the  minority,  or  even  of  a  single  member,  to  any  other  pur- 
pose, without  his  consent. 

All  persons  present  at  the  meeting  at  which  the  vote  is 
taken,  disposing  of  the  fund,  if  no  one  dissents,  are  consid- 
ered as  voting  with  the  majority  for  the  motion,  and  assenting 
thereto.  Their  right  to  the  fund  is  concluded;  but  it  is  other- 
wise as  to  those  not  present. 

Where,  under  a  resolution  of  the  majority,  the  surplus  fund 
has  passed  into  the  hands  of  new  trustees,  between  whom  and 
the  original  contributors  there  is  no  privity,  such  trustees  are  not 
accountable  to  them  for  the  fund.  Their  remedy  is  against 
the  original  trustees  only.'^ 

The  Supreme  Court  of  Kentucky  interfered  to  require  the 
funds  raised  by  a  fair,  to  be  applied  to  the  objects  for  which 
the  fair  was  held,  and  to  prevent  self -constituted  trustees  from 
diverting  such  funds  from  those  objects.^ 

Contributors  to  a  fund  creating  a  trust  for  religious  or 
charitable  purposes,  cannot,  as  such,  call  the  trustees  to  an 
account  for  their  disposition  of  the  fund.     They  have  no  stand- 

'  Birminiihain  et  al.  v.  Gallagher  -  Abels  v.  McKeen,  18  N.  J.  E. 
&  Savings  Bank,  112  Mass.  lOOfSee    462. 

•Snow  V.  Wheeler,  113  Mass.  179.  ^Morton  v.  Smith,  5  Bush.  (K\-.) 

467. 


Chap.  8,  §151.]  .iurisdiction.  175 

iiig  in  court  for  such  a  purpose,  unless  they  are  trustees,  or 
eestuis  qui  trustejit,  or  have  some  reversionary  interest  in  the 
trust  fund.' 

An  action  for  money  had  and  received  may  be  maintained 
by  a  member  of  an  unincorporated  vohmtary  society  against 
the  treasurer,  to  recover  the  amount  of  his  contribution,  wliere 
it  appears  that  the  latter  has  possession  of  the  funds,  and  the 
purposes  and  objects  foi  which  the  contributions  were  made 
cannot  be  accomplished. ° 

If  it  is  so  provided,  the  majority  may  control  the  minority 
by  a  vote,  if  such  vote  is  for  the  purposes  of  the  association, 
and  within  its  provisions.  Courts  of  chancery  have  power  to 
see  that  societies  are  faithful  trustees  in  the  disposition  of  the 
fund,  and  will  see  that  it  is  appropriated  to  the  object  designed, 
and  will  not  suffer  it  to  be  diverted  to  another,  unless  with  the 
consent  of  the  contributors. 

§  151.  Rights  of  members  in  property  iiiid 
funds  of  society.  Where  the  society  is  organized  for  pur- 
poses other  than  profit,  there  may  be  property  belonging  to  it, 
derived  from  the  payment  of  dues  or  lines,  or  consisting  of 
the  furniture  of  its  rooms,  but  the  possession  of  such  property 
is  a  mere  incident,  and  not  the  main  purpose  or  object  of  the 
society.  A  member  has  no  severable  proprietary  interest  in 
it,  and  no  right  to  any  proportionable  part  of  it,  either  during 
the  continuance  of  his  membership,  or  upon  his  withdrawal. 
He  has  merely  the  enjoyment  and  use  of  it  while  he  is  a  mem- 
iDer,  but  the  property  remains  with  and  belongs  to  the  society, 
while  it  continues  to  exist,  like  a  pew,  the  ultimate  and  domi- 
nant property  in  which  is  in  the  corporation  or  congregation, 
and  not  in  the  pew-holder;  and  wlien  the  body  ceases  to  exist, 
those  who  may  then  be  members  become  entitled  to  their  ju-o- 
portionate  share  of  its  assets.' 

Upon  the  sale  of  land  belonging  to  a  voluntary  society 
which  is  unincorporated,  with  no  rules  or  provisions  as  to 
the  disposition  of  its  pro])erty,  the  members  at  tlie  time  of 
the  sale  are  entitled  to  divide  the  proceeds  in  equal  shares.  * 

It  is  well  settled  that  where  members  have,  contrary  to  the 
constitution  and  government  of  a  voluntary  society  to  wliich 
they  belonged,  severed  their  connection  tlierewith,  they  cannot 

'Ludlam  V.  Higbee,  11    N.J.  Eq.  Y.)  329 ; //i  re  The  St.  James   Club, 

342.  13  Enn:.  Law  &  Eq.  Rep.  .')92. 

-  Koehler  v.  Brown,  2  Daly  78.  ••  Brown    v.   Dale,   25  Ens;.    Rep. 

^  Wliite  V.  Brownell,  3   Daly   (N.  (Moak)  77G. 


176  JURISDICTION.  [Chap.  8,  §152, 

invoke  the  aid  of  a  court  of  equity  to  take  the  property  of  the 
society  from  those  who  adhere  to  its  organization,  objects  and 
government. 

A  court  of  e([uity  will  not,  at  the  instance  of  the  minority, 
compel  the  majority  of  the  owners  of  the  furniture  of  an  C)dd 
Fellows'  hall  to  purchase  the  interests  of  the  minority  therein, 
nor  to  remove  and  sell  the  same,  and  divide  the  proceeds 
among  all  the  owners,  where  it  appears  that  the  furniture  is 
being  used  for  the  very  purposes  for  which  it  was  originally 
purchased.' 

A  court  of  equity  has  power  to  place  the  property  of  an 
unincorporated  society  in  the  hands  of  a  receiver,  order  the 
same  to  be  sold,  and  the  proceeds  divided  among  its  members; 
but  it  will  not  exercise  this  power  unless  equity  clearly 
requires  it. 

A  bill  in  equity  praying  for  such  relief,  brought  by  a 
minority  of  the  members  against  a  majority,  will  be  dismissed 
where  the  evidence  fails  to  show  that  the  property  is  being 
mismanao;ed  or  M'asted.'^ 

Where  it  is  shown  that  the  payment  of  salaries  to  the 
officers  of  a  society  seems  to  have  been  regulated  rather  by  the 
condition  of  the  expense  fund  in  the  treasury  than  by  the 
compensation  actually  earned;  where  the  system  of  paying  so 
called  compensation,  is  but  a  disguised  scheme  for  a  division 
of  profits  among  its  officers;  where  it  appears  that  the  affairs 
of  the  society  have  been  operated  for  the  profit  of  its  officers, 
the  courts  will,  upon  application,  interfere  to  protect  the 
interests  of  the  members.^ 

§  152.  Same  suT)ject  coiitiiiued.  Where  two  benev- 
olent societies,  one  of  men,  and  the  other  of  women,  having 
separate  organizations  but  the  same  ol)jects,  united  in  purchas- 
ing a  cemetery,  each  society  contributing  a  moiety  of  the 
purchase  money,  and  for  a  time  mutually  participating  in  the 
use  and  profit  of  the  property,  although  the  title  was  taken  to 
the  officers  of  one  of  them,  a  subsecpient  going  over  of  a 
majority  of  the  members  of  the  other  society  to  that  one  will 
not  deprive  such  other  society  of  its  rights  of  property  resulting 
from  the  payment  of  half  the  price,  and  the  same  will  be 
declared  and  enforced  by  decree  of  court.^ 

'  Robbins  et  al.   v.  Waldo  Lodge,  Ass'n,  42  Ohio  St,  579;  McCarthv's 

Me. ;  7  Atl.  Rep.,  540.  Appeal,  17  W.  N.  Cases  (Pa ),  \S2. 

■  Hinkley  et  al.  v.  Blethen  et  al,  *  Ladies'    Benevolent    Society    v. 

78  Me.  221 ;  3  Atl.  Rep.  655.  Benevolent  Society,  3  Tenn.  Cli.  100. 

^  State    ex    rel.  v.  Peoples',   etc.. 


Chap.  8,  §152.]  jurisdiction.  177 

"Where  certain  members  of  Teutonia  Lodge,  etc.,  withdrew 
from  the  jurisdiction  of  the  grand  lodge  of  the  state,  sur- 
rendered their  charter  and  formed  a  new  lodge,  adopting  the 
same  name,  and  other  members  continued  steadfast  in  their 
allegiance,  and  the  charter  was  duly  delivered  to  them  as  the 
lodge,  that  body  which  continued  true  to  its  allegiance  and 
held  the  charter,  was,  as  to  certain  property  of  the  original 
lodge,  taken  by  the  members  who  withdrew,  adjudged  to  be 
Teutonia  Lodge,  etc.,  and,  as  such,  to  be  entitled  to  the  prop- 
erty of  the  society.  ' 

The  seceding  members  of  an  incorporated  society,  forming 
a  new  society,  cannot  maintain  a  suit  for  the  recovery  of 
debts  due  to  the  society  from  which  they  seceded.' 

In  cases  of  personal  chattels  in  which  the  remedy  at  law  by 
damages  would  be  utterl}'  inadequate,  and  leave  the  injured 
party  in  a  state  of  irremediable  loss,  equity  will  interfere  and 
grant  full  relief,  by  requiring  a  specific  delivery  of  the  thing 
which  is  wrongfully  withheld.  This  may  occur  where  the 
thing  is  of  peculiar  value,  as  being  ancient,  or  the  production 
of  some  distinguished  artist,  or  a  family  relic  or  ornament. 
This  rule  has  been  held  applicable  to  the  personal  property  of 
societies;  and  where  a  highly  ornamented  silver  tobacco  box 
had  been  for  many  years  handed  down  from  a  certain  officer 
of  the  society  to  his  successor,  and  a  person  retained  posses- 
sion of  it  after  his  term  of  office  expired,  and  refused  to  deliver 
it  to  his  successor  in  office,  unless  the  society  would  pass 
his  accounts,  the  court,  without  measuring  the  value  of 
the  box,  decreed  it  to  be  delivered  up  to  the  proper 
officer.  " 

A  person  who  has  been  expelled  from  the  "  Society  of 
Believers,"  commonly  called  Shakers,  cannot  maintain  an 
action  for  services  rendered  the  society  prior  to  such  expulsion, 
or  for  his  expenses  of  support  since  separation.  " 

Li  a  social  partnership,  where  an  absolute  community  of 
property  with  right  of  survivorship,  on  the  one  hand,  and 
care,  hy  the  community,  of  every  member,  through  life,  on  the 
other,  is  the  fundamental  and  pervading  principle,  if  one 
member  be  unjustly  expelled  by  an  usurped,  though  unques- 
tioned, authority,  not  liaving  under  the  clear  terms  of  the 
association    any    right   to   expel  him,    the     court    will    not 

'  Altman  et  al.  v.  Benz  et  al.,  27  ^  iVlls  v.  Read,  3  Ves.  Jr  70. 

N.  J.  E.  331,  *  Grosvenor  v.  United  Sociotv,  118 

'  Smith  V.  Smith,  3  Desau  (S.  C),  Mass.  78;  Waite  v.  Merrill,   4  Me. 

557.  102. 

1« 


178  JURISDICTION.  [Chap.  8,  §153. 

oblige  him  to  return  to  the  association,  tliere  not  being  on  its 
part  an  otter  of  full  and  satisfactory  reconciliation  and  i-ecep- 
tion,  but  will  interfere  with  the  fundamental  and  pervading 
principle;  and  though  the  expelled  member  brought  nothing 
into  the  communit}^  will  give  to  him,  for  himself,  a  separated 
and  individual  part  of  the  property.  And  where  payment  for 
the  party's  services  at  the  ordinary  rate  of  services  like  his, 
during  many  years  that  he  was  a  member,  would  give  to  him 
more  than  his  numerical  proportion  or  share  of  the  whole 
capital  stock,  and  where  the  question  of  profits  was  a  little 
obscure,  the  court,  regarding  this  as  the  simplest  and  most 
natural  justice,  gave  to  him  his  numerical  share  or  proportion 
of  the  whole  capital  stock,  from  whatever  source  arising,  as 
the  same  existed  at  the  time  he  was  expelled,  irrespective  of 
the  amount  which  he  found  in  the  association  when  he  became 
a  member.v 

§  153.  Revocation  of  charter  granted  by  the 
state.  The  Independent  Order  of  B'nai  B'rith,  organized 
for  benevolent  purposes,  has  numerous  lodges  in  different 
states  of  the  Union.  The  primary  or  subordinate  lodges  are 
grouped  into  districts,  over  which  are  district  grand  lodges 
composed  of  delegates  elected  by  the  subordinate  lodges. 
Above  these  is  a  "  Constitution  Grand  Lodge."  There  is 
also  an  appellate  court  for  the  settlement  of  controversies  aris- 
ing within  the  order.  Among  the  general  laws  is  one  which 
requires  each  subordinate  lodge  to  obey  the  ordinances,  laws 
and  resolutions  of  the  "  Constitution  Grand  Lodge,"  its  district 
grand  lodge,  and  the  final  decisions  of  the  appellate  court, 
under  penalty  of  suspension  and  forfeiture  of  its  charter. 

These  charters  are  paper  documents  emanating  from,  and 
issued  by  the  district  grand  lodges  to  the  subordinate  lodges 
within  their  respective  territorial  limits. 

Jedidjah  Lodge  of  Baltimore  was  within  the  limits  of  Dis- 
trict JSIo.  5,  and  received  a  charter  from  the  grand  lodge  of 
that  district.  In  December,  1853,  Jedidjah  Lodge  was  incor- 
porated under  the  Act  of  the  Maryland  legislature  of  1852,  and 

'  Nachtrieb  v.  The  Harmony  Set-  privileges,  benefits  and  advantages 

tlement,  3  Wall.  Jr.  66 ;    In   a  case  contemplated  by  the  association,  he 

brought    by    another     complainant  discharging  the    duties    incumbent 

asainst  these  same  defendants,  there  on  him  as  a  member  of  it,"  the  court 

beins  imperfect  evidence  of  any  ex-  refused  to  grant  the  complainant  any 

pulsum,  and  the  defendants  by  their  relief,  but  dismissed  the   bill  with 

answer,    ''conceding  the  complain-  costs;  Lemix  v.  The   Harmony   So- 

ant's  perfect  right  and  liberty  to  re-  ciety,  3  Wall.  Jr.  87. 
turn    to  the  enjoyment    of  all  the 


Chap.  8,  §153.]  .turisdiction.  179 

in  February,  1870,  District  Grand  Lodge  No.  5,  was  incor- 
porated under  the  general  corporation  law  of  Maryland  of  1868. 
A  bill  was  tiled  in  July,  1884  by  District  Grand  Lodge  No.  5 
against  Jedidjali  Lodge,  alleging  that  the  complainant  had  for- 
feited the  charter  of  said  Jedidjah  Lodge  under  the  laws  and 
constitution  of  the  order,  and  claiming  that,  by  reason  thereof, 
the  funds  of  said  Jedidjah  Lodge  belonged  to  the  complainant. 
The  Supreme  Court  of  Maryland  held  that  the  charter 
granted  by  the  state  to  the  Jedidjah  Lodge  could  not  be  for- 
feited by  the  grand  lodge,  whether  acting  in  its  conventional 
or  corporate  capacity — that  the  charter  could  be  annulled  by 
the  legislature,  or  forfeited  under  such  proceedings  for  that 
purpose  as  are  authorized  by  statute  or  by  the  common  law, 
and  in  no  other  mode,  and  by  no  other  agency;  that  the  Jed- 
idjah Lodge  held  the  funds  in  controversy,  and  had  the  right 
to  hold  them,  under  the  corporate  powers  conferred  by  the 
state  charter,  and  so  held  them  entirely  unaffected  by  the  for- 
feiture of  the  documentary  or  conventional  charter  granted  to 
it  by  the  district  grand  lodge,  by  virtue  of  which  forfeiture 
alone  the  complainants  claimed  such  funds.' 

'  District  Grand  Lodge  v.  Jedid-     104;  Goodman  v.    Jedidjah  Lodse, 
jah  Lodge  65  Md.236;  3   Atl.   Kep.    67  Md.  117;  9  Atl.  Rep.  13. 


ISO  JURISDICTION.  [Chap.  8,  §155, 


Jurisdiction  of  Courts  over  Societies.     Part  III. 


Sec.  154.    Religious  societies. 

S  r    1^6  I  Ecclesiastical  jurisdiction— civil  rights. 

bEC.  Ia7.     ggcessiou  in  religious  society— division  of  property,  etc- 

S?*^    IfiO    ■  Pj^operty  and  trusts  of  religious  societies. 
Sec.  161.    Trustees  and  officers. 

§.  154.  Religious  societies.  It  is  not  proposed 
to  discuss  at  length  in  this  work  the  subject  of  religious  socie- 
ties, but  so  many  of  the  principles  which  govern  the  courts 
in  their  treatment  of  such  societies,  are  ajjplicable  to  societies 
at  large,  that  it  is  necessary  to  refer,  at  least,  to  the  jurisdic- 
tion of  courts  over  them.  Churches  in  this  country  are,  in  a 
legal  point  of  view,  no  more  than  other  societies  voluntarih^ 
organized  by  its  citizens, 

§  155.    Ecclesiastical  jurisdiction — civil  riglits. 

Civil  courts  in  this  country  have  no  ecclesiastical  jurisdiction. 
They  cannot  revise  or  question  ordinary  acts  of  church  disci- 
pline, and  can  only  interfere  in  church  controversies  when  civil 
rights,  or  rights  of  property,  are  involved. 

When  a  civil  right  depends  upon  some  matter  pertaining 
to  ecclesiastical  affairs,  the  civil  tribunal  tries  the  civil  right, 
and  nothing  more,  taking  the  ecclesiastical  decisions  out  of 
which  the  civil  right  has  arisen  as  it  finds  them,  and  accepting 
those  decisions  as  matters  adjudicated  by  another  jurisdic- 
tion. 

The  civil  courts  act  upon  the  theory  that  the  ecclesiastical 
courts  are  the  best  judges  of  merely  ecclesiastical  questions, 
and  of  all  matters  which  concern  the  doctrines  and  discipline- 
of  the  respective  denominations  to  which  they  belong 

When  a  person  becomes  a  member  of  a  church  he  becomes 
such  upon  the  condition  of  submission  to  its  ecclesiastical  juris- 
diction, and  however  much  he  may  be  dissatisfied  with  the 
exercise  of  that  jurisdiction,  he  has   no   right   to  invoke  the 


<]3hAP.  8,  §156.]  JURISDICTION.  181 

supervisory  power  of  a  civil  court,  so  long  as  none  of  his  civil 
rights  are  invaded. ' 

While  the  courts  will  decide  nothing  affecting  the  ecclesias- 
tical  rights  of  a  church,  yet  its  civil  rights  to  property  are 
subjects  for  their  examination,  to  be  determined  in  con- 
formity to  the  laws  of  the  land,  and  the  principles  of 
equity.  '^ 

The  usage  of  a  church,  or  the  law  of  its  organization  as  a 
religious  society,  if  they  are  to  be  considered  in  deciding  legal 
controversies,  should  be  proved  as  facts.' 

The  testimony  of  those  in  authority  in  the  church,  such  as  a 
bishop  of  a  diocese,  is  competent  to  define  the  meaning  of  terms 
and  w^ords,  as  used  in  the  church,  and  to  show  the  usages  and 
•customs  of  the  church,^ 

Courts  are  frequently  required  to  ascertain  facts  from  his- 
tory, but  then  they  consult  its  authentic  sources,  and  ascertain 
such  facts  from  them,  and  not  from  the  opinions  of  witnesses. 
The  mere  opinions  of  witnesses  as  to  departures  from  the 
faith  of  a  religious  denomination,  are  not  admissible  as 
evidence.^ 

It  is  not  the  province  of  courts  of  justice  to  decide,  or  to 
inquire  what  system  of  religious  faith  is  most  consistent,  or 
what  religious  doctrines  are  true,  or  what  are  false,  in  any  case; 
and  it  seldom  becomes  necessary  for  courts  to  discuss,  or  to 
examine  the  creeds,  or  confessions  or  systems  of  faith  of  the 
different  religious  sects,  in  determining  questions  of  law, 
except  in  cases  where  they  are  called  upon  to  see  that  a  trust 
or  charity  is  administered  according  to  the  intention  of  the 
original  founders." 

Whether  or  not  devotional  singing,  forming  a  part  of  the 
public  worship  of  a  particular  i-eligious  society,  should  be 
accompanied  by  instrumental  music,  must  be  determined  by 
those  who  administer  the  discipline  of  the  church  to  which 
they  belong.' 

§  156.  Same  subject  continued.  AYhere  the  rector 
•of  a  parish  sued  the  parish  for  a  balance  due  liim  on  his  salary 
under  the  canons  of  the  diocese  and  his  contract  with  the  vestry 

'WhiteLick,  etc.,  V.  White  Lick  ^  Bird  v.  St.   Mark's  Church,    63 

etc.,  89  Ind.  136.  Towa  567 ;  Ferraria  v.  Vascoucellos, 

-  Ferraria  V.  Vasconcellos,  31    111.  31111.25. 

25.  ^  Happy  V.  Morton,  33  111.  398. 

=>  Vasconcellos  V.  Ferraria,  27    111.  '"•  Hale  V.  Everett,  53  N.  H.  !). 

237 ;  Hendricksou  v.  Decow,  1  N.  J.  ■" Tartar  v.  Gibbs,  24  :\Id.  323. 
Eq.  577. 


182  .1  URisDicTioN.  [Chap.  8,  §156. 

of  the  parish,  it  was  held  that,  by  the  faihire  to  pay  him  his 
full  salary,  a  clear  legal  right  had  been  invaded,  and  that  it 
M'as  the  duty  of  the  civil  court  to  protect   and  enforce  that 

right.' 

A  purely  ecclesiastical  office,  such  as  that  of  a  deacon  in  a 
church,  an  office  not  created  or  expressly  authorized  by  state 
law,  but  created  by  an  unincorporated  ecclesiastical  l)ody,  and 
tilled  by  election  by  a  body  which  possesses  no  corporate  powers 
or  functions,  is  not  under  the  jurisdiction  of  a  court  of  law,  so  as 
to  be  made  subject  to  a  q^uo  warranto  proceeding.^ 

The  decisions  of  ecclesiastical  courts  are  tinal  as  to  what 
constitutes  an  offense  against  the  discipline  of  the  church. 

The  civil  courts  will  interfere  with  churches  and  religious 
associations,  when  rights  of  property  or  civil  rights  are 
involved,  but  it  will  not  revise  the  decisions  of  such  associa- 
tions upon  ecclesiastical  matters,  merely  to  ascertain  their 
iurisdiction.^ 

But  two  justices  of  the  court,  in  Chase  ,v.  Cheney,  dissent 
and  say:  "We  concede  that  when  a  spiritual  court  has  once 
been  organized  in  conformity  with  the  rules  of  the  denomina- 
tion of  which  it  forms  a  part,  and  when  it  has  jurisdiction  of 
the  parties  and  the  subject  matter,  its  subsequent  action  in 
the  administration  of  spiritual  discipline  will  not  be  revised 
by  the  secular  courts.  The  simple  reason  is  that  the  associa- 
tion is  purely  voluntary,  and,  w^hen  a  person  joins  it,  he  consents, 
that  for  all  spiritual  offenses,  lie  will  be  tried  by  a  tribunal 
organized  in  conformity  with  the  laws  of  the  society.  But  he 
has  not  consented  that  he  will  be  tried  by  one  not  so  organized, 
and  when  a  clergymen  is  in  danger  of  being  degraded  from 
his  office,  and  losing  his  salary  and  means  of  livelihood  by  the 
action  of  a  spiritual  court  unlawfully  constituted,  we  are  very 
clearly  of  opinion  he  may  come  to  the  secular  courts  for  pro- 
tection. It  would  be  the  duty  of  such  courts  to  examine  the 
■  question  of  jurisdiction,  without  regard  to  the  decision  of  the 
spiritual  court  itself,  and  if  they  tind  such  tribunal  has  been 
organized  in  defiance  of  the  laws  of  the  association,  and  is  exer- 
cising a  merely  usurped  and  arbitrary  power,  they  should 
furnish  such  protection  as  the  laws  of  the  land  will  give.     We 

•Bird  V.  St.  Mark's  Church,  62  Iowa  ^  Chase  et  al.  v.    Cheney,   58    111. 

568.  509;    Watson  v.    Jones,    80    U.    S- 

'Ter  Vree  v.  Geerlings,  55  Mich.  679. 
562;22N.  W.  Rep.  89. 


Chap.  8,  §157.]  jurisdiction.  183 

consider  this  position  clearly  sustainable  upon  principle  and 
authority."  * 

§  157.    Secession   in  religious  society,  division 

of  property,  etc.  In  the  absence  of  testimony,  it  will  be 
presumed  that  religious  societies  cannot  dissolve  their  connec- 
tion with  the  principal  organization  without  permission." 

Where  the  usage  of  a  church,  or  the  law  of  its  organization, 
gives  the  majority  of  the  members  of  a  congregation  the  right 
to  withdraw  from  its  ecclesiastical  authority,  neither  the  act 
of  the  majority  in  withdrawing,  nor  the  act  of  the  minority  in 
adhering,  works  a  forfeiture  of  the  rights  of  either  to  the 
church  property,  because  in  neither  case  has  an  illegal  act 
been  done. 

All  the  members,  the  minority  adhering  to  the  former 
church  connection,  as  well  as  the  majority  who  seceded,  there- 
from, being  equally  beneficiaries  of  the  common  property,  in 
case  of  a  separation,  where  such  separation  is  permissible,  the 
property  should  be  divided  between  the  two  parties  in  ])ropor- 
tion  to  "their  numbers  at  the  time  of  the  separation.' 

But  the  rule  is,  that  where  a  church  is  erected  for  the  use  of 
a  particular  denomination,  or  religious  persuasion,  a  majority 
of  the  members  of  the  church  cannot  abandon  the  tenets  and 
doctrine  of  the  denomination,  and  retain  the  right  to  the  use 
of  the  property;  but  such  secessionists  forfeit  all  right  to  the 
property,  even  if  a  single  member  adheres  to  the  original  faith 
and  doctrine  of  the  church. 

This  rule  is  founded  in  reason  and  justice.  Church  prop- 
erty is  rarely  paid  for  by  those  alone  who  worship  there,  and 
those  who  contril)ute  to  its  purchase  or  erection  are  ])resumed 
to  do  so  with  reference  to  a  particular  form  of  worship,  or  to 
]>romote  the  promulgation  or  teaching  of  particular  doctrines 
or  tenets  of  religion,  which,  in  their  estimation,  tend  most  to 
the  salvation  of  souls;  and  to  perv^ert  the  property  to  another 
purpose,  is  an  injustice  of  the  same  character  as  the  applica- 
tion of  other  trust  property  to  purposes  other  than  those 
designed  by  the  donor.  Ilen'ce  it  is,  that  those  who  adhere  to 
the  original  tenets  and  doctrines,  for  the  promulgation  of 
which  a  church  has  been  erected,  are  the  sole  beneficiaries 
designed    by  the  donors;   aiul   those   who   depart    from  and 

'  See  Watson   v.   Avery,  2  Bush  '  Ferraria  v.  Vasconcellas,  31   111., 

(Ky.V  333.  25;  Smith  v.    Swormsteilt,  16  How, 

•^'Vascoacellos  V.  Ferraria,  27  111.,  288;  Brooke   v.    Shacklett,  13  Gratt 

237.  (Va.),  301. 


IS-i  JURISDICTION.  [Chap.  8.  §158.' 

abandon  these  tenets  and  doctrines,  cease   to  be  beneficiaries, 
and  forfeit  all  claim  to  the  title  and  use  of  such  property. 
These  are  the  principles  on  which  the  decisions  are  founded.' 

§  158.  Same  subject  continvied.  The  title  to  tlie 
church  property  of  a  divided  congregation  is  in  that  part  of  it 
which  is  acting  in  harmony  with  its  own  law;  and  the  ecclesi- 
astical laws  and  principles  which  were  accepted  among  them, 
before  the  dispute  began,  are  the  standard  for  determining 
which  party  is  right.* 

An  organized  church  cannot  be  divested  of  its  property, 
even  though  a  majority  of  its  members  enter  into  a  new  organ- 
ization which  adopts  the  name  of  the  original  church,  provided 
the  old  organization  still  exists.^ 

While  two  parties  in  a  congregation  were  trj'ing  to  get  pos- 
session of  the  church  property,  and  their  disputes  were  under 
the  scrutiny  of  the  synod  of  the  church,  the  court  directed  each 
party  alternately  to  have  the  weekly  use  of  such  church 
property/ 

Where  a  schism  occurs  in  an  ecclesiastical  organization, 
which  leads  to  a  separation  into  distinct  and  conflicting  bodies, 
the  respective  claims  of  such  bodies  to  the  control  of  the  prop- 
erty belonging  to  the  organization  must  be  determined  by  the 
ecclesiastical  laws,  usages,  customs,  principles  and  practices 
which  were  accepted  and  adopted  by  the  organization  before 
the  division  took  place. 

Where  the  local  congregation,  which  is  itself  a  member  of  a 
much  larger  and  more  important  religious  organization,  and  is 
under  its  government  and  control,  divides  into  two  separate 
and  conflicting  bodies,  and  one  of  these  bodies,  to  the  exclu- 
sion of  the  other,  is  recognized  by  the  proper  superior  body 
as  constitntina:  the  true  cono-reg-ation,  the  decision  of  the 
proper  superior  body  in  that  respect,  when  established  as  a 

'  Ferraria  v.  Vasconcellos,  supra;  77 ;    Methodist   Church  v.   Wood,  5 

Winebrenner  v.  Colder,   43  Pa.  St ,  Ohio,   283;   Hadden  v.    Chorn,  8  B. 

244;  Baker  et  al  v.  Fales.   16  Mass.,  Mon.  (Ky.),  70;  Deaderick  v.  Lamp- 

488;   Stebbins   v.  Jenninirs,  10  Pick,  son,  11    Heisk  (Tenn),  523. 
(Mass.),  172;  Sawyer  v.  Baldwin,  11        -  McGinnis  v.    Watson,  41  Pa.  St. 

Pick.  (Mass  ),  495:    Skilton  v.  Web-  9. 

ster.   Brightly's    Rep'ts.  (Pa),  203;        »  Venable  v.   Coflfman,  2  W.   Va. 

Dublin  case,  38  N.  H.,  459;  Lewis  V.  310;  Harper  v.   Straus,  14  B.  Mon. 

Watson,  4  Bush.  (Ky.).  228;  Gib.son  (Ky.)48. 

V.  Armstrong,  7   B.  Monroe   (Ky.),        ■*  Bowden  v.  McLeod,  1  Edw.  Ch. 

481,  criticised  in   Ferraria  v.  Vas-  (N".  Y.)  588;  See  Curd  v.   Wallace, 

concellns,  s^Ap^-a;  Den  v.  Bolton,  12  7    Dana    (Ky.)   190;    where     court 

N.  J.   L    206;     Reform   Church  v.  divided  the  use  of  the  church. 
Theological  Seminary,  4  N.  J.  Eq. 


Chap.  8,  §159.]  jurisdiction.  185 

fact,  is  binding  upon  the  civil  courts  as  regards  questions  of 
property  arising  out  of  tlie  division  between  sucli  separate  and 
conflicting   bodies.' 

A  seceding  minority  of  a  church,  while,  in  good  faith,  in 
possession  of  the  church  building,  placed  repairs  upon  it  which 
were  necessary,  and  it  was  held  that  they  had  a  good  claim  for 
the  value  of  the  improvements,  which  should  be  paid  by  the 
majority,  as  a  condition  to  the  exclusive  use  of  the  house  by 
the  latter.'^ 

In  case  of  a  division  of  a  religious  corporation,  both  parties 
still  adhering  to  the  tenets  and  discipline  of  the  organization, 
the  property  should  be  divided  between  them,  in  proportion  to 
their  numbers  at  the  time  of  such  separation. 

In  making  partition  of  the  property  of  a  religious  corpora- 
tion, in  case  of  division,  mathematical  nicety  is  neither  attaina- 
l)le  nor  important.  The  only  satisfactory  mode  is  to  count 
church  members,  by  virtue  of  their  membership,  and,  in  addi- 
tion, to  count  all  pew  holders,  as  members  of  the  congregation.' 

§  159.  Property  and  trusts  of  religious  soci- 
eties. Rights  of  property,  or  of  contract,  of  religious 
organizations,  are  under  the  protection  of  the  law,  and  the 
actions  of  their  members  are  subject  to  its  restraints. 

AVhere  a  church  is  of  a  strictly  congregational,  or  independ- 
ent organization,  and  the  property  held  by  it  has  no  trust 
attached  to  it,  its  right  to  the  use  of  the  property  must  be 
determined  by  the  ordinary  principles  which  govern  voluntary 
associations." 

A  charitable  bequest  to  an  unincorporated  religious  society 
is  not  invalid,  by  reason  of  its  being  composed,  to  a  great 
extent,  of  persons  not  resident  within  the  state.  Nor  is  such 
bequest  void,  because  given  simply  to  an  unincorporated  asso- 
ciation, and  not  for  any  specified  charitable  use.'' 

'White    Lick   Qiiar.   Meetinu;  v.  Seibert,  3  Pa.   St.  282;    Harmon   v. 

White  Lick  etc..  89  Ind.   13C;    Wat-  Droher,  1  Speor's  Eq.  87;    Smith   v. 

son  V.  Jones,  80  U.  S.   679;    Gaff   v.  Nelson,  18  Vt.  511 ;    Bowden   v.  Mc 

Greer,  88  Ind.  122.     In   tliese  cases  Leod,   1    Edw.   Ch.    (N.    Y.)     588; 

the  authorities  are  reviewed  at  s^reat  Koshi's  Appeal,  (59  Pa.  St.  462. 

length  and   among   those  which  are  -  Iladden  v.  Chorn,  8   B.  Monroe 

cited  upon  the   above   and    kindred  (Ky.)  70. 

propositions  are  the  following:  '  Niccolls     v.     Hugg.   47   111.  47; 

Harri-son  v.  Hoyle,  24  Ohio  St.  254;  Hale  v.  Everett,  53  N.  H.  9. 

Chase  v.  Cheney,  58  111.  509 ;  Cluirch  *  Watson  v.  .loues,  80  U.  S.  679. 

T.  Witherell.3  t*aige296;  Lawver  v.  'Evan-jcelical    Ass'u,    Appeal.    35 

Chipperly.  7  Pai-xe  281 ;  Watkins  v.  Pa.  St.  316:  Banks  v.  Phelau,  4  Barb. 

Wilcox,  66  N.   Y.   654 ;    Church    v.  (N.  Y.)  80. 


186  JURISDICTION.  [ClIAP.  8,§160. 

The  religious  tenets  of  a  donor  in  trust  to  a  religious  corpora- 
tion may  be  shown,  as  well  as  other  circumstances,  to  aid  in 
ih6  construction  of  ambiguous  provisions.' 

Where  a  religious  society  purchases  land,  and  the  title  vests 
in  it  in  fee,  as  a  corporation,  the  majority  of  the  society  has  a 
right  to  control  its  use  and  occupation.  They  cannot  be 
deprived  of  this  right  by  any  supposed  error  of  doctrine.  It 
is  incident  to  the  very  nature  of  such  corporation  to  hold  such 
property  at  the  will  of  a  majority,  if  the  charter  of  incorpora- 
tion does  not  otherwise  provide.  They  may  occupy  and  man- 
age such  property  as  they  please,  so  long  as  they  admit  the 
minority  to  the  same  beneiits  as  themselves." 

Individuals  may  dedicate  property,  by  way  of  trust,  to  the 
purpose  of  sustaining  and  propagating  definite  religious  doc- 
trines, and  it  is  the  duty  of  the  court  to  see  that  the  property 
so  dedicated  is  not  diverted  from  such  trust.  It  is  not  in  the 
power  of  the  majority  of  a  congregation  to  carry  the  property 
so  confided  to  them  to  the  support  of  a  new  and  conflicting 
doctrine.^ 

Where  a  fund  is  bequeathed  to  an  ecclesiastical  society,  the 
interest  of  which  is  to  be  applied  for  the  purpose  of  maintain- 
ing a  free  school  in  one  of  the  districts,  an  agreement  by  the 
society  to  apply  the  fund  to  the  support  of  the  ministry  is  a 
fraud  on  third  persons,  and  void.* 

A  court  of  equity  will  not  interfere  to  prevent  the  misuse 
or  abuse  of  a  trust  of  a  religious  nature,  unless  there  is  a  real 
and  substantial  departure  from  the  purposes  of  the  trust, 
which  amounts  to  a  perversion  of  it.° 

§  160.  Same  subject  continued.  An  eleemosynary 
charity  is,  in  the  general  scope  of  its  benevolence,  essentially^ 
unsectarian,  and  can  only  be  made  sectarian  by  having  such 
limitations  and  restrictions  placed  upon  it  by  the  donor  as 
make  it  so. 

The  mere  making  of  an  ecclesiastical  organization  trustee 
for  an  ordinary  eleemosynary  charity,  does  not  of  itself 
give  a  sectarian  character  to  the  charity,  and  if  no  limi- 
tations or  restrictions  are  imposed  to  the  contrary,  the  eccles- 
iastical body  may  continue  in  possession  of  the  charity  as   its 

'  Kinskern  v.  Lutheran  Churches,  White  Lick  etc.  v.  White   Lick   etc. 

1  Sand.  Ch.  (N.  Y.)  439.  89  Ind.  136. 

-Keyserv.  Stansifer,   6   Oh.  363;  •'Bailey  v.   Lewis  3  Day   (Conn.) 

Calkins  v.  Cheney,  92  111.  463.  450. 

3  Watson  V.  Jones,  80   U.   S.  679;  "  Happy  v.  Morton,  33  111.  398. 


Chap.  8,  §160.]  jueisdiction.  18T 

trustee  so  long  as  it  continues  to  be  essentially  and  character- 
isticallj  the  same  organization,  without  reference  to  changes 
or  modifications  which  it  may  make  in  matters  of  mere  detail, 
or  of  relatively  subordinate  importance,  connected  with  its 
faith,  doctrine  and  practices.' 

When  a  society,  of  a  particular  religious  sect  or  denomin- 
ation, is  formed  with  a  strictly  sectarian  or  denominational 
name  descriptive  of  the  fundamental  doctrines  of  the  sect  to 
which  it  belongs,  the  presumption  is  that  it  was  constituted 
for  the  purpose  of  promoting  the  vital  and  fundamental  doc- 
trines of  such  sect  or  denomination.  In  such  cases,  where  a 
conveyance  is  made  to,  or  a  trust  created  for  the  benefit  or  use 
of  such  religious  society,  by  its  denominational  name,  with  no 
other  particular  designation  in  the  deed  of  the  tenets  or  doc- 
trines which  it  is  to  be  used  to  advance  and  support,  the 
denominational  name  may  be  asufficientguide  as  to  the  nature 
of  the  trust,  so  far  as  I'espects  doctrines  which  are  admitted  to 
be  fundamental.  And  in  such  case,  those  having  control  of 
property  held  in  trust  for  the  benefit  of  such  religious  society 
may  be  restrained  from  applying  the  property,  or  the  use  of 
it,  to  the  promotion  of  religious  tenets  and  doctrines  clearly 
opposed  and  adverse  to  the  fundamental  doctrines  and  faith  of 
such  sect  or  denomination  at  the  time,  and  immediately  after, 
such  trust  was  created.* 

Where  the  original  trustees  appointed  by  the  founders  of  a 
religious  charity  or  trust,  applied  the  fund  to  the  support  of 
certain  religious  doctrines,  and  that  application  has  been  long 
continued,  and  has  always  been  acquiesced  in  by  the  founders 
of  the  charity  or  trust,  a  court  of  equity  will  not  permit  such 
application  to  be  changed  or  interfered  with,  unless  such 
change  is  clearly  required  by  the  plainly  expressed  intention 
of  the  donor." 

The  majority  in  a  religious  association,  not  incorporated, 
have  supreme  control  and  direction  of  the  use  of  the  church 
property,  as  respects  all  matters  not  determined  by  the  articles 
of  association  of  the  particular  society,  the  organization  and 
discipline  of  the  denomination  to  which  it  belongs,  or  the 
trust  under  which  the  property  may  have  been  conveyed;  and 
the  minority  cannot,  by  procuring  a  charter  of  incorporation, 

'  White  Lick,  etc.  v.   White   Lick,        ■'  Hale  v.  Everett,  53  N.  H.  9. 
etc.,  89  Ind.  136;  Attorney  General        '  Hale  v.  Everett,  aw^jra. 
V.  Moore,  19  N.  J.  Eq.  503;  Watkins 
V.  Wilco.x,  06  N.  Y.  654. 


188  JURISDICTION.  [Chap.  8,  §161. 

acquire  the  riglit  to  the  management  of  the  property  in  oppo- 
sition to  the  will  of  the  majority  of  tliose  interested.  ^ 

§  161.  Trustees  —  officers.  There  is  one  principle 
common  to  the  trustees  of  all  incorporated  churches.  They 
have  the  possession  and  custody  of  the  temporalities  of  the 
church.  They  are  considered,  virtute  officii,  entitled  to  the 
possession,  and  are  lawfully  seized  of  the  grounds,  buildings, 
and  other  property  belonging  to  the  church.  Though  they 
hold  the  church  property  in  trust  for  the  congregation,  still 
it  is  their  possession,  and  the  courts  are  bound  to  protect  them 
against  every  irregular  and  unlawful  intrusion  made  against 
their  will,  whether  by  the  pastor,  members  of  the  congregation 
or  by  strangers.^ 

A  court  of  chancery  has  jurisdiction  to  compel  the  persons 
having  charge  of  the  temporalities  of  a  church,  incorporated 
or  otherwise,  to  the  faithful  performance  of  their  trust,  and 
also  to  prevent  the  diversion  of  the  property  from  its  original 
purpose.^ 

Where  the  trustees  of  a  church  corporation  executed  a  mort- 
gage on  the  church  property  to  secure  a  legitimate  debt,  it  was 
held  that  there  was  no  equity  in  refusing  to  enforce  the  mort- 
gage, under  color  of  protecting  a  charitable  use." 

A  court  has  jurisdiction  to  compel  the  trustees  of  a  church, 
who  have  violated  their  trust  by  appropriating  the  funds  to  the 
propagation  of  doctrines  differing  from  the  legitimate  doctrines 
of  the  church,  to  deliver  up  the  church  property  to  other  trus- 
tees of  the  church,  who  will  properly  apply  them,  and  who 
have  been  duly  elected  by  those  entitled  to  elect  trustees,^ 

A  court  of  equity  will  entertain  jurisdiction  to  compel  the 
trustees  of  a  church  to  permit  clergymen  who  adhere  to  the 
principles  of  the  church,  to  minister  to  the  congregation  in 
the  church  edifice,  without  regard  to  the  comparative  numbers 
of  the  respective  parties  in  the  congregation." 

Whenever  the  trustees  of  a  religious  society  organized 
under  the  general  law  concerning  its  incorporation,  do  any 
act  which  obstructs  the  enjoyment  of  the  property  for  the  pur- 
poses and  in  the  mode  authorized  by  the  usages  of  the  church 

'  Henry    v.    Deitrich,   84  Pa.   St.  ''  Magie    v.  German  etc.  Church, 

286.  13  N.  J.  Eq.  77. 

''German    etc.    Congregation    v.  'Gable  v.  Miller,  10  Paise  (N.Y.) 

Presler.  17.  La.  Am.  127.  627;  Watson  v.  Jones,  80  U.  S.  679. 

^  Bowden  v.    McLeod,  1  Edwards  '^  Skilton   v.    Webster,    Brightly's 

Ch.  (N.  Y.)588;    Wilson  v.    Island  Reports  (Pa)  203. 
Church,  2  Rich.  (S.  C.)  Eq.  192. 


Chap.  8,  §161.]  jurisdiction.  180" 

as  an  organized  body,  they  are  guilty  of  a  violation  of  that 
trust,  which  will  be  corrected  by  a  court  of  chancery. 

A  trust  of  this  character  is  not  distinguishable,  in  this, 
from  any  other  trust  over  which  courts  of  chancery  exercise  a 
supervisory  power.' 

Trustees  are  seized  for  the  use  of  the  body;  and  each  mem- 
ber of  the  church  becomes  entitled  to  a  benehcial  interest  in 
the  property  of  the  church,  so  long  as  his  or  her  connection  or 
membership  continues.  All  the  members  of  the  body  become 
beneliciaries  in  such  property  in  an  equal  degree,  notwith- 
standing some  of  them  may  have  contributed  a  larger  sum 
than  others  towards  the  common  property.'' 

Aliens  may  be  trustees  and  incorporators  in  a  religious  cor- 
poration.' 

The  court  has  no  authority  to  control  the  discretion  of 
trustees  of  a  church  in  the  management  of  its  funds,  so  long 
as  they  do  not  violate  their  charter;  they  are  responsible  to 
their  constituents  alone.* 

A  majority  of  the  members  of  the  church  cannot  control  the 
action  of  the  trustees,  in  regard  to  its  property,  against  the 
usage  and  rules  of  the  organization." 

■  Brunnenmeyer  v.  Buhre,  B3  111.  ^  Wardens,   etc.,   v.   Barksdale,    1 

183.  Strobh.  (S.  C),  Eq.  197. 

'^Brunnenmeyer  v.  Buhre,  32  III.  *  Brunnenmeyer  v.  Buhre,  32  111. 

183 ;  Ferraria  v.  Vasconcellos,  31  111.  183 ;    People    v.     Steele,    2    Barb^ 

25.  (N.  Y.),  397. 

^  Cammeyer    v.    United   German 
Church,  2  Sand.  Ch.  N.  Y.  186. 


PART   II. 

The  Laay  of  Mutual  Benefit 
Insurance. 


CHAPTER  IX. 
Mutual  Benefit  Societies. 

Sec.  162.     Introductory. 

Sec   164  ('  'r^®^'"  object  is  insurance,  not  benevolence. 

Sec  165.    Rights  of  members  of  a  mutual  benefit  society. 

Sec.  163.  Introductory.  Life  insurance  did  not 
become  a  business  of  importance  in  England  until  about  the 
•commencement  of  the  present  century.  In  this  country,  the 
contract  of  life  insurance  met  with  little  favor  for  many  years 
later.  The  wonderful  development  of  the  life  insurance 
business,  of  which  evidences  are  seen  upon  every  side,  has  taken 
place  within  forty  years.  Mutual  benefit  insurance  is  of  even 
more  recent  growth.  There  is  probably  no  mutual  benetit 
society  in  this  country,  to-day,  whose  organization  took  place 
more  than  thirty  years  ago;  there  are  few  that  have  been  in 
existence  for  fifteen  years;  and  by  far  the  greater  part  of  those 
now  in  existence  have  been  organized  within  the  past  twelve 
years. 

xA.t  a  recent  meeting  of  representatives  of  mutual  benefit 
societies,  it  was  estimated  that,  at  the  eiul  of  the  year  1886, 
there  were  twelve  hundred  societies  doing  a  mutual  assess- 
ment life  insurance  business  in  this  country,  having  a  total 
membership  of  at  least  two  million  members,  carrvinf 
$4,500,000,000.00  of  insurance;  that  the  total  amount "^coP- 
lected  on  assessments,  dues,  etc.,  was  $40,000,000  for  that 
year;  that  the  expenses  amounted  to  $6,000,000,  and  benefit 
funds  paid  on  account  ol  the  death  of  sixteeii  thousand  mem- 
bers amounted  to  $30,000,000,  leaving  a  surplus  of  $4,000,000 

(1!»1) 


192  BENEFIT    SOCIETIES.  [ClIAP.  9,  §162. 

on  that  year's  business  to  be  carried  to  reserve  funds.  These 
results  were  arrived  at  from  tlie  statements  made  by  four 
hundred  and  sixty-two  societies,  in  which  numl)er  is  inchided 
all  the  principal  societies  in  this  country,  and  from  estimates 
made  from  a  general  knowledges  of  the  other  societies. 

For  the  purposes  of  this  work,  it  is  immaterial  whether  this 
statement  is  even  approximately  correct.  Suffice  it  to  say, 
that  mutual  benelit  insurance  has  grown  in  popular  favor, 
until  at  the  present  time  many  hundred  thousands  of  persons 
are  carrying  such  insurance,  for  the  benelit  of  those  for  whom 
it  is  their  duty  and  their  pleasure  to  provide;  that  the  courts 
of  every  state  are  frequently  called  upon  to  determine  the 
rights  of  parties  under  such  contracts  of  insurance,  and  that 
the  rights  of  members  and  their  beneficiaries,  under  contracts 
entered  into  for  such  worthy  and  commendable  objects,  are 
entitled  to  the  tender  and  intelligent  consideration  of  courts. 

The  advocates  of  mutual  assessment  insurance  claim  for 
their  plan  many  virtues  and  many  advantages  over  all  other 
modes  of  life  insurance.  But  on  the  other  hand,  the  advocates 
of  ordinary  life  insurance  are  bitter  in  their  denunciations  of 
mutual  benelit  societies.  This  work  has  nothing  to  do  with 
this  controversy.  It  is  not  the  province  of  the  writer  on  the 
legal  aspect  of  such  societies  and  their  contracts,  to  discuss 
the  merits  of  the  different  plans  of  life  insurance.  It  is  enough 
that  such  societies  exist,  and  are  recognized  in  statutes  and 
courts,  as  a  feature  of  the  insurance  business  of  the  country. 

The  standing  in  court  given  to  these  societies  by  the  courts 
of  the  land,  is  well  expressed  by  the  Supreme  Court  of  Ohio 
in  The  State  ex  rel.  v.  The  Standard  Life  Association,  38  Ohio 
St.  281,  where  it  is  said: 

"  It  does  not  fall  within  the  province  of  the  court  to  discuss 
the  relative  merits  of  the  different  plans  of  life  insurance,  as 
between  the  old  line  systems  and  those  formed  on  the  co-oper- 
ative or  mutual  assessment  plan.  It  is  enough  to  know  that 
the  statutes  of  Ohio  authorize  each  plan,  and  each,  doubtless,, 
has  its  merits  if  properly  administered,  and  demerits  if  not. 
Whatever  be  the  system,  it  is  the  highest  duty  of  the  courts 
to  see  that  the  trust  is  faithfully  administered.  This  is  espe- 
cially true  in  the  co-operative  or  mutual  assessment  plan, 
where  there  is  no  reserve  or  surplus  fund,  and  where  the  assess- 
ments to  pay  benefits  are  collected  directly  from  the  members, 
who  generally  do  not  understand  the  mysteries  of  life  insurance 
management.  These  associations  doubtless  had  their  origin  in 
the   friendly  and   benevolent   organizations   and    fraternities 


Chap.  9,  §163.]  benefit  societies.  193 

claiming  like  affiliation  and  purpose.  These  and  other  organ- 
izations, having  for  their  object  the  mutual  aid,  benefit  and 
relief  of  their  members,  or  their  families  or  heirs,  when  honestly 
and  economically  administered  as  a  sacred  trust,  and  not  with 
a  view  to  profit,  are  worthy  the  protection  of  law." 

§  163.  Their  object  is  insurance,  not  benevo- 
lence. History  tells  us  that  the  origin  of  life  insurance  is 
traceable  to  benevolent  motives.  The  object  of  such  insurance 
was  to  provide  a  fund  for  the  widows  and  orphans  of  a  person 
whose  income  ceased  with  his  life;  and  such  an  object  was 
certainly  benevolent.  But  whatever  maybe  the  motive  under- 
lying the  great  scheme  of  life  insurance,  it  is  certain  that,  in 
its  practical  application,  life  insurance  is,  and  must  be,  founded 
upon  contract.  Its  benevolence  must  flow,  not  from  mere 
good  will,  but  from  legal  obligation.  Its  gifts  must  not 
depend  upon  the  continuance  of  the  charitable  impulses  of 
those  who  shall  pay,  but  upon  mutual  promises. 

Although  the  object  of  the  insurer  in  making  the  contract, 
and  the  objects  of  the  organization  with  which  he  contracts 
are  benevolent  and  not  speculative,  they  have  no  bearing  upon 
the  nature  and  effect  of  the  business  conducted,  and  the  con- 
ract  so  made.  Nor  will  the  character  of  the  contract  be 
changed  by  the  fact  that  the  organization  issuing  it  designates 
itself  as  a  benevolent  or  charitable  society,  instead  of  an  insur- 
ance company.  The  name  of  the  society  will  not  necessarily 
fix  or  establish  its  real  character. 

If  the  prevalent  purpose  and  nature  of  an  association,  of 
whatever  name,  be  that  of  insurance,  its  legal  character  will 
not  be  changed  by  the  benevolent  or  charitable  results  to  its 
beneficiaries. 

A  society  which  by  contract  agrees  to  pay  to  the  beneficiarv 
of  a  deceased  member  a  sum  of  money,  is  a  mutual  insurance 
company,  whatever  may  be  the  terms  of  payment  of  the  con- 
sideration by  the  member,  or  the  mode  of  payment  of  the  sum 
to  be  paid  in  the  event  of  his  death.' 

■Commonwealth    v.    Wetherbee,  ety  v.  Winthrop,  85  111.537;  Illinois 

105  Mass  161 ;  Stateci;  rel.  v.  Benev-  Mason's  etc.  v.  Baldwin,  86  111.  479; 

olent  Society,  72  Mo.  146;    State  ex-  Farmer    v.    State  ex  rel.    Texas;  7 

rel.    V.    Benefit  Association,  6  Mo.  S.  W.  Rep.  220;  Supreme  Comman- 

App.  172;  State   ex  rel.  v.  Brawner,  dery     v.     Ainsworth,    71   Ala.   436; 

15  Mo.  App.  597;  Bolton  v.  Bolton.  Sherman  v.  Commonwealth,  82  Kv. 

73  Me.  299;  Schunk  v.    Ge.ffenseiti-  102;  5  Ky.  Law  Rep.  874;    State   v. 

ger  etc.  Fund.44  Wis.370;  Erdmann  Vigilant     Ins.     Co,    30   Kan.    585; 

V.  Mutual  etc.  44  Wis.  376;  Dietrich  State   v.  N.  W.  Mutual  etc.,  16  Neb. 

V.    Madison   Relief  Association.  45  549;  State  v.   Mutual  Ben.  Associa 

Wis.  79 ;  Mason's  Benevolent  Soci-  tion  18  Neb.  276. 
13 


194  BENEFIT    SOCIETIES.  [ChAP.  9,  §163 


The  leading  case  upon  this  subject  is  Commonwealth  v. 
Wetherbee,  105  Mass.  160,  wherein  the  court  says: 

"A  contract  of  insurance  is  an  agreement,  by  wliich  one 
party,  for  a  consideration  (whicli  is  usually  paid  in  money, 
either  in  one  sum,  or  at  different  times  during  the  continuance 
of  the  risk)  promises  to  make  a  certain  payment  of  money 
upon  the  destruction  or  injury  of  something  in  which  the 
other  party  has  an  interest.  In  fire  insurance  and  marine 
insurance,  the  thing  insured  is  property;  in  life  or  accident 
insurance,  it  is  the  life  or  health  of  a  person.  In  either  case, 
neither  the  times  and  amounts  of  payments  by  the  assured, 
nor  the  modes  of  estimating  or  securing  the  payment  of  the 
sum  to  be  paid  by  the  insurer,  affect  the  question  whether  the 
agreement  between  them  is  a  contract  of  insurance.  All  that 
ir requisite  to  constitute  such  a  contract  is  the  payment  of  the 
consideration  by  the  one,  and  the  promise  of  the  other  to  pay 
the  amount  of  the  insurance  upon  the  happening  of  injury  to 
the  subject  by  the  contingency  contemplated  in  the  contract. 
The  contract  made  between  tlie  Connecticut  Mutual  Benelit 
Company  and  each  of  its  members,  by  the  certiticates  of  mem- 
bership issued  according  to  its  charter,  does  not  differ  in  any 
essential  particular  of  form  or  substance  from  an  ordinary 
policy  of  mutual  life  insurance.  The  subject  insured  is  the 
life  of  the  member.  The  risk  insured  is  death  from  any  cause 
not  excepted  in  the  terms  of  the  contract.  The  assured  pays 
a  sum  fixed  by  the  directors  and  not  exceeding  ten  dollars,  at 
the  inception  of  the  contract,  and  assessments  of  two  dollars 
each  annually,  and  of  one  dollar  each  upon  the  death  of  any 
member  of  the  division  to  which  he  belongs,  during  the  con- 
tinuance of  the  risk.  In  case  of  the  death  of  the  assured  by  a 
peril  insured  against,  the  company  absolutely  promises  to  pay 
to  his  representatives,  in  sixty  days  after  receiving  satisfactory 
notice  and  proof  of  his  death,  "  as  many  dollars  as  there  are 
members  in "  the  same  division,  the  number  of  which  is 
limited  to  five  thousand.  The  payment  of  this  sum  is 
subject  to  no  contingency  but  the  insolvency  of  the  corpora- 
tion. The  means  of'paying  it  are  derived  from  the  assessments 
collected  upon  his  death  from  other  members;  from  the  money 
received  upon  issuing  other  certificates  of  membership,  which 
the  by-laws  declare  may,  after  payment  of  expenses,  be  '  used 
to  cover  losses  caused  by  the  delinquencies  of  members,'  and 
from  the  guaranty  fund  of  one  hundred  thousand  dollars,  estab- 
lished by  the  corporation  under  its  charter. 


Chap.  9,  §164.]  benefit  societies.  195 

This  is  not  the  less  a  contract  of  mutual  insurance  upon  the 
life  of  the  assured,  because  the  amount  to  be  paid  by  the  cor- 
poration is  not  a  gross  sum,  but  a  sum  graduated  by  the 
number  of  members  holding  similar  contracts;  nor  because  a 
portion  of  the  premiums  is  to  be  paid  upon  the  uncertain 
periods  of  the  deaths  of  such  members;  nor  because,  in  case  of 
non-payment  of  assessments  by  any  member,  the  contract  pro- 
vides no  means  of  enforcing  payment  thereof,  but  merely 
declares  the  contract  to  be  at  an  end,  and  all  moneys  pre- 
viously paid  by  the  assured,  and  all  dividends  and  credits 
accrued  to  him,  to  be  forfeited  to  the  company." 

A  corporation  with  salaried  officers,  paying  commissions  on 
risks  obtained,  insuring  and  admitting  to  membership  any- 
one having  the  requisite  conditions  of  age  and  health,  and 
requiring  no  other  qualification  for  membership,  cannot  evade 
the  insurance  laws  by  calling  itself  a  benevolent  society  and 
obtaining  a  charter  as  such.' 

The  law  will,  w^hen  occasion  requires,  look  behind  the  names 
of  societies,  and  pass  its  judgment  ujDon  their  schemes  and 
modes  of  business.^ 

In  discussing  the  subject  of  mutual  assessment  insurance 
courts  have  intimated  that  there  is  possibly  a  distinction 
between  a  society,  the  primary  object  of  which  is  to  contract 
with  its  members  for  the  insurance  of  their  lives,  and  a  society 
organized  for  a  social,  literary,  or  benevolent  purpose,  to  which 
a  feature  of  mutual  insurance  is  added  for  the  purpose  of 
mutual  aid.^ 

The  distinction  amounts  to  this,  that  while  the  contract  is 
one  of  mutual  life  insurance,  the  societies  having  the  feature 
of  mutual  aid,  cannot  be  said  to  be  carrying  on  a  general 
business  of  mutual  life  insurance.  There  is,  however,  no  case 
in  which  it  has  been  held  that  such  a  society  is  not  an  insur- 
ance company  within  the  meaning  of  the  statutes  regulating 
insurance  companies,  exce])t  where  such  society  was  chartered 
under  special  laws  providing  for  the  incorporation  of  such 
societies. 

§  164.  Same  subject  continued.  The  payment  of 
the  benefit  fund  by  a  mutual  benefit  society  to  the  beneficiary, 

'State  V.  Citizens' Benefit  Associa-  Daly  168;    Barbaro    v.    Occidental 

tion,  6  Mo.  App.  163.  Grove,  4  Mo.  App.  429;  State  ex   rel. 

'^Governors' etc.,  v.   Am.  Art  Un-  v.    Benefit   Association  6  Mo.   App. 

ion,  7N  Y.  228;    State    ex    rel.    v.  172;  Swift  v.  San   Francisco  Board 

•Graham,  66  Iowa  26.  etc.  67  Cal.  567. 

^  Durian  v.  Central  Verian  etc.  7 


196  BENEFIT    SOCIETIES.  [ChAP.  9,  §165. 

or  payment  of  a  "  sick  benelit,"  or  "pernianent  disability 
indemnity  "  by  the  society  to  a  member,  is  not  voluntary,  and 
in  the  nature  of  a  gift,  but  is  the  fulfillment  of  a  contract  of 
insurance  entered  into  by  the  member  and  the  society.' 

A  contract  by  a  society  to  pay,  at  certain  stated  periods  of 
time,  certain  sums  of  money  as  endowments  to  living  members, 
or,  in  case  of  their  death,  to  pay  certain  other  sums  of  money 
as  benefits  to  their  beneficiaries,  is  life  insurance,  both  as  to 
the  endowment  and  the  benefit.''' 

A  mutual  benefit  society  incorporated  under  special  laws,  is 
governed  by  the  law  under  which  it  is  incoi-porated,  and  by  the 
law  relating  to  corporations,  but,  in  carrying  on  its  business  of 
mutual  assessment  insurance,  it  is  not  subject  to  the  statutes 
of  the  state,  relating  to  life  insurance  and  life  insurance  com- 
panies.' 

Mutual  benefit  societies  are  subject  to  the  application  of 
those  legal  principles  applicable  to  other  mutual  life  insurance 
companies." 

§  165.  Rights  of  inembers  in  luutual  benefit 
societies.  The  rights  of  a  member  of  a  mutual  benefit  soci- 
ety are  two-fold  —  those  which  arise  out  of  the  contract  of 
membership,  and  tliose  which  arise  under  his  contract  for 
benefits. 

In  seeking  to  determine  the  rights  of  a  member  of  such  a 
society,  it  is  necessary,  therefore,  to  determine  under  which 
contract  they  arise. 

The  corporate  rights  of  a  member  of  a  mutual  benefit  society 
are  subject  to  the  control  of  the  corporation;  but  his  rights  as 
an  insured  person  rest  upon  his  contract  with  the  society.^ 

'Bolton  V.  Bolton,  73  Me.  299.  782;  Supreme  Council  v.   Fairman, 

"  Endowment  &  Benevolent  Asso-  62  How.  Pr.  386. 

elation  v.  State,  35  Kan.  253 ;    State  *  Erdmann  v.  Order  of  Herman's 

V.  Mutual  Aid  Association,  35  Kan.  Sons,  44  Wis.  376. 

51 :     9  Pac.  Rep.  956.  °  Bradfield  v.  Union  Mutual   etc. 

3  State  ex  rel.  v.  The  Mutual  Pro-  9  "Weekly  Notes  of  Cases  (Pa.)  436;. 

tection  Association,  26  Oh.    St.  19;  Rosenberger  v.  Washington  Mutual 

State  V.  Iowa  Mutual  Aid  Associa-  etc.,  87  Pa.  St.  207. 
tion,  59  Iowa  125 ;  12  N.   W.   Rep. 


CHAPTER   X. 


Certificate  of  Membership. 


Sec.  168.  Where  executed. 
Sec.  169.  When  executed. 
Sec.  170.     Delivery  of  certificate  to  member. 

^  r   17"^  f  ^'instruction  of  the  contract  of  insurance. 

Sec.  174.     In  good  standing. 

Sec.  175.    Suicide. 

Sec.  176.    Known  violation  of  law. 

Sec.  166.  Certificate  of  nieiiibershii)  —  gener- 
ally. The  certificate  of  membership  in  a  mutual  benefit  soci- 
ety is  a  part  of  the  written  evidence  of  the  contract  of  insur- 
ance. 

An  ordinary  life  insurance  policy  contains  the  whole  con- 
tract of  insurance.' 

In  mutual  benefit  societies,  the  charter,  constitution  and 
by-laws  in  force  at  the  time  of  the  admission  of  a  member  are 
a  part  of.  the  contract  of  insurance,  whether  they  are  referred 
to  in  the  certificate  of  membership  or  not.° 

The  provisions  of  the  charter,  constitution  and  by-laws,  so 
far  as  they  relate  to  this  contract,  cannot  be  altered  so  as  to 
■effect  it,  without  the  consent  of  the  assured  member.' 

But  an  amendment  to  the  by-laws  of  a  mutual  benefit  soci- 
ety merely  for  the  purpose  of  regulating  its  mode  of  transact- 
ing; its  business,  and  adding;  no  new  condition  to  contracts  of 
insurance  already  issued,  is  binding  on  the  assured.'' 

While  it  is  only  existing  by-laws  of  a  mutual  benefit  society 
which  are  presumed  to  be  known,  and  in  reference  to  which 

'  Union  Mutual  etc.  v.  ]\Io\vrv,  96  Pulford  v.  Fire  Department  of  De- 

U.  S.  544.                                       '  troit,  31  Mich.  458;  Becker  v.  Farm 

"^  Supreme   Commandery    etc.    v.  ers'     Mutual     etc.,  48    Mich.    610; 

Ainsworth,  71  Ala.  436;    Simeral  v.  Bradfleld    v.    Union   Mutual  etc.,  9 

Dubu(iue  Mutual  etc.,  18  Iowa  322.  Weekly  Notes  of  Cases  (Pa.)  436. 

'  Morrison  v.  Wisconsin  Odd  Pel-  ••Georgia   Masonic  Mutual  etc.,  v. 

lows  etc.,  59  Wis.    162:     18  N.  W.  Gibson,  52  Ga.  640;  Walsh  v.  .Etna 

Rep.   13;     Guudlach '.  v.    Germania  etc.  Co.,  30  Iowa  145 ;    Treadway  v. 

Mechanics  Assn.,  49  How.   Pr.  190;  Hamilton,  29  Conn.  08. 

(197) 


198  CERTIFICATE.  [ChAP.   10,  §166, 

it  is  presumed  that  contracts  of  insurance  are  made;  and  while 
it  is  true  that  a  society  has  not  the  power,  by  laws  of  its  own 
enactment,  to  disturb  or  divest  rights  which  it  had  created,  or 
to  impair  the  obligations  of  its  contracts,  or  to  change  its 
responsibilities  to  its  members,"or  to  draw  them  into  new  and 
distinct  relations;  yet,  ])arties  may  contract  with  societies  in 
reference  to  laws  of  future  enactment,  and  may  agree  to  be 
bound  and  affected,  as  they  would  be  bound  and  effected  if 
such  laws  were  existing;  and  they  may  thereby  consent  that 
such  laws  may  enter  into,  and  form  part  of  their  contracts, 
modifying  or  varying  them. 

Where  a  contract  of  insurance  is  issued,  conditioned  that  it 
shall  be  subject  to  such  by-laws  as  may  thereafter  be  enacted 
by  the  society,  by-laws  subsequently  passed  become  a  part  of 
the  contract.' 

Where,  for  instance,  a  certificate  is  silent  as  to  the  con- 
sequence, if  the  member  should  die  by  his  own  hand,  but 
recites  that  any  violation  of  the  "  requirements  of  the  law 
now  in  force,  or  hereafter  enacted,  governing  the  order,  or  this 
class,  shall  render  this  certiticate  null  and  void,"  and  that  a 
condition  upon  which  its  obligation  depends  is  "  the  full  com- 
pliance with  all  the  laws  of  the  order  now  in  force,  or  that 
may  hereafter  be  enacted  ";  and  it  issued,  and  was  accepted  by 
the  assured  in  writing  "  subject  to  the  laws  of  the  order  now 
in  force,  or  which  may  hereafter  be  enacted  by  the  Supreme 
Commandery";  and  at  the  time  it  was  issued,  there  was  a 
general  law  of  the  society  rendering  it  a  condition  upon  which 
a  certificate  could  issue,  and  upon  which  its  benefits  could  be 
realized,  that  the  member  to  whom,  or  upon  whose  life  it  was 
issued,  should  comply  with  the  "general  laws  of  the  order 
then  in  existence,  or  which  might  thereafter  be  enacted  " ;  but 
the  by-laws  contained  no  provision  declaring  an  avoidance  or 
forfeiture  of  the  certificate  in  the  event  the  member  should 
die  by  his  own  hands,  it  was  held  that,  by  force  of  the  recitals, 
stipulations  and  provisions  above  noted,  a  by-law,  enacted  by 
the  society  after  the  certificate  was  issued  and  accepted,  pro- 
viding that  a  certificate  of  this  class  should  be  forfeited  if  the 
member,  whether  sane  or  insane,  should  take  his  own  life, 
entered  into  and  formed  a  part  of  the  certificate,  avoiding  it  in 
the  event  the  member,  whether  sane  or  insane,  should  take 
his  own  life." 

'  Supreme  Commandery,  etc.,  v.  *  Supreme  Commandery  v.  Ains- 
Ainsworth,  71  Ala.,  436.  worth,  supra. 


Chap.  10,  §166a.]  certificate.  199 

§  166  a.  In  some  societies,  the  issue  of  certificates  of 
membership,  as  a  part  of  the  contract  of  insurance,  is  not  con- 
templated. The  charter,  constitution  and  by-laws,  contain  the 
plan  of  insurance,  designate  who  shall  be  beneficiaries  of  its 
members,  and  the  order  in  which  they  shall  take,  or  provide 
for  registration  of  beneficiaries  on  the  books  of  the  society, 
and  constitute  the  whole  contract  of  insurance.' 

In  such  cases,  membership  in  the  society  carries  with  it  a 
specified  amount  of  life  insurance. 

The  certificate  of  membership  is,  in  any  event,  a  mere 
fragment  of  the  contract,  and,  it  may  be  said,  without  much 
extravagance  of  expression,  that  whatever  vitality  it  possesses, 
is  derived  from  the  charter,  constitution  and  by-laws  of  the 
society. 

The  certificate  of  membership  may,  however,  be  necessary 
to  the  contract  of  insurance.  Where  the  charter  of  a  societ}' 
provided  that  the  beneficiary  shoidd  be  designated  in  the 
manner  to  be  pointed  out  in  the  by-laws,  and  the  b3^-laws 
provided  that  the  benefit  fund  should  be  payable  to  the  person 
designated  in  the  certificate  of  membership,  it  was  held  that 
the  failure  of  a  member  to  take  out  a  certificate  of  member- 
ship was  fatal  to  the  contract  of  insurance,  and  that  the  society 
was  not  liable  to  any  one  for  the  benefit  fund." 

In  societies  where  the  certificates  are  not  contracts  with  the 
beneficiaries,  the  laws,  rules  and  regulations  in  regard  to 
beneficiaries  may  be  changed  during  the  continuance  of  the 
certificates,  so  as  to  limit  and  abridge  their  interests;  and 
such  limitations  are  not  subject  to  objection  as  impairing 
vested  rights,  or  the  obligation  of  contracts.^ 

Where  the  constitution  of  a  mutual  benefit  society  provides 
that  its  by-laws  may  be  amended  at  any  time,  a  beneficiary  in 
a  benefit  certificate,  who  is  not  a  member  of  the  society,  cannot 
complain  that  a  l)y-law  in  existence  at  the  time  the  certificate 
was  issued,  providing  that  the  member  may  surrender  the 
certificate,  and  receive  a  new  one,  with  the  consent  of  the 
beneficiary,  was  amended  so  as  to  omit  the  consent  of  the 
beneficiary.  The  beneficiary  has  no  vested  rights  in  such 
certificate,  not  being  a  party  to  the  contract;  nor  can  such 
beneficiary  recover  on  the  original  certificate,  it  having  been 
surrendered,  and  a  new  one  issued.' 

'  Baldwin  v.  Golden  Star  Frater-  '  Durian  v.  Central  Verein,  7  Daly 

nity.  47  N.  J.  L.,  111.  (N.  Y.),  168. 

•>  Bishop  V.  Grand    Lodne,  43  Hiin  *  Byrne  v.  Casey,  Texas.  8  S.  W. 

N.Y.),  472,  26    N.  Y.  Weekly  Die.  Rep.,  38. 
166. 


200  CERTIFICATE.  [ClIAP.  10,  §103. 

§  167.  Same  subject  continued,  A  person  accept- 
ing directly,  or  by  assignment  from  tlie  assured  member,  a 
certiiicate  of  membership  in  a  mutual  benefit  society,  declar- 
ing that  its  constitution,  by-laws,  and  conditions  of  association 
are  a  part  thereof,  is  bound  by  -the  by-laws  and  constitution. 
He  is  not  justified  in  supposing  that,  because  each  of  the  con- 
ditions annexed  to  the  policy  refers  to  a  by-law,  the  by-laws 
contain  no  further  conditions.' 

It  may  be  laid  down  as  the  settled  law  in  fire  insurance  that 
a  contract  of  insurance  is  complete  when  the  insurer  offers  to 
insure  on  certain  terms,  and  the  offer  is  accepted  by  the  appli- 
cant, and  that  the  contract  need  not  be  in  writing  unless  the 
law  expressly  requires  it.* 

These  principles  have  been  held  to  apply  in  mutual  benefit 
societies,  in  cases  where  the  charter  and  by-laws  contain  the 
whole  contract  of  insurance,  and  where  there  is  no  provision 
that  the  contract  must  be  in  writing.' 

When  an  accepted  applicant  for  membership  pays  his  mem- 
bership fee,  and  promises  in  his  written  application  to  pay  the 
further  sum  of  one  dollar  and  ten  cents  whenever  any  other 
member  dies,  or  forfeit  his  claim  to  a  benefit;  and  the  by-laws 
provide  that  the  association,  within  thirty  days  after  satisfac- 
tory proof  of  his  death,  will  pay  to  his  "widow"  as  many  dol- 
lars, not  exceeding  one  thousand,  as  there  are  surviving  mem- 
bers at  the  time  of  the  death,  the  contract  is  completed,  and 
is  one  of  life  insurance. 

The  text  books,  as  well  as  the  opinions  of  various  courts, 
contain  definitions  of  the  contract  of  insurance,  as  it  is  applied 
to  its  various  subjects;  and  although  differently  expressed, 
they  all  concur  as  to  its  substantive  elements,  that  all  that  is 
essential  to  such  a  contract  is  the  payment  of  a  consideration 
by  one  party,  and  the  promise  of  the  other  to  pay  an  agreed 
amount  upon  the  happening  of  the  contingency  specified  in 
the  contract,  it  being  understood  that  the  former  party 
had  an  insurable  interest  in  the  subject  matter  insured' 

§  168.  Where  executed.  Generally  speaking,  the 
validity  of  a  contract  is  to  be  decided  by  the  law  of  the   place 

'  Miller  V.  Assiu-ance  Association,  Pac.  Coast  Journal  481.  See  Sec. 169. 

42  N.  J.  Eq.  459;  7  Atl.  Rep.  89.i.  *  Bolton  v.   Bolton,   73    Me.    299; 

'^  May  on    Insurance    Sec.    14-24;  Elkhart  Mutual  Aid  etc.   v.    Houo:h- 

Ins.  Co.  V.  Colt.  20  Wall.  5'i0.  ton,  98  Ind.  149. 

'Oliver  V.Am.  L.   of   Honor,    10 


OhAP.  10,  §169.]  CERTIFICATE.  201 

where  it  is  made,  and  if  valid  or  void  there,  it  is  valid  or  void 
•everywhere.' 

In  lieimsdyk  v.  Kane  et  al.,  1  Gallison  374,  Judge  Story 
says  the  rule  is  well  settled  "  that  the  law  of  the  place  where  a 
contract  is  made  is  to  govern  as  to  the  nature,  validity  and 
construction  of  such  contract''  unless  it  shall  appear  from  the 
tenor  of  such  contract,  it  was  entered  into  with  a  view  to  the 
laws  of  some  other  state.'' 

Huberus,  in  his  De  Conflictu  Legiim^  Vol.  2,  book  1  tit.  3, 
says : 

"  The  general  rule  is  that  contracts  are  to  be  interpreted 
according  to  the  laws  of  the  country  where  they  are  made,  but 
if,  from  the  terms  or  nature  of  the  contract,  it  appears  it  was 
to  be  executed  in  a  foreign  counti*y,  or  that  the  parties  had 
respect  to  tlie  laws  of  another  county,  then  the  place  of 
making  the  contract  becomes  immaterial,  and  the  obligation 
must  be  tested  by  the  laws  of  the  country  where  the  duty  was 
to  be  performed." 

A  policy  issued  from  the  office  of  a  society  in  Wisconsin 
was  held  to  have  been  executed  in  Oregon,  because  the  policy 
required  that  it  should  be  countersigned  by  the  agent  in  Oregon, 
before  it  should  be  valid  and  binding.^ 

In  Hyde  v.  Goodnow,  3  N.  Y.  269,  under  the  provisions  of 
the  application  and  policy,  which  contained  the  stipulation  that 
it  should  not  be  binding  until  the  application  and  premium  note 
were  deposited  in  the  ottice  of  the  company  and  approved  by  its 
directors,  it  was  held  that  when  the  application  was  approved 
and  the  policy  deposited  in  the  mail  at  the  place  of  the 
company's  office,  addressed  to  the  defendent,  the  contract  was 
then  and  thereby  executed,  and  became  binding  on  the  parties 
thereto.^ 

§169.  When  executed.  A  certificate  of  membership 
is  void  as  a  policy  of  insurance  if  executed  by  the  society  after 
the  death  of  the  assured,  and  in  ignorance  of  that  fact.'  ' 

'  There  are  a  few  exceptions  to  this        "» See  Yonge  v.  Equitable  Life  etc. 

rule.  30  Fed.  Rep.  902. 

■^  Fitch  V.  Remer,  1  Biss.  337.  =•  Giddinsrs  v.  N.  W.  Mutual,   etc., 

'N.  W.  Mutual  etc.  V.  Elliott  e<  r/i.  102   U.  S.,   108;    Insurance     Co.   v. 

5  Fed.  Rep.  225;  See   also   Pomerov  Ewinii,  1)2  U.  S.,  377;   Insurance  Co. 

V.  Insurance  Co  ,  40  111.  400;  Thwini,'  v.  Youn-r,  90   U.  S..  152;   Markey  v. 

V.   Insurance  Co.,    Ill     Mass.     109;  Ins.  Co.,  103   Mass.  92;    Ins.    Co    v. 

Hardie  V.  Insurance  Co.,  26  La.   An.  Kennedy,  G   Bush.,  450;   Ins.  Co.  v. 

242;   Insurance  Co.,  v.  Kennedy,   6  Willets,  24    Mich.,   208;  Missolhorn 

Bush.450;  Giddings  V.  Ins.  Co.,    102  v.     Mutual  Reserve,    etc.,    30  Fed. 

U.  S.  108.  Re]>.,  545. 


202  CERTIFICATE.  [ClIAP.   10,  §169. 

In  Yonge  v.  Equitable  Life,  etc.,  30  Fed.  Rep.  902,  a  policy 
of  insurance  was  held  valid  and  binding  although  it  was  never 
actually  delivered  into  the  possession  of  the  applicant.' 

A  member  of  a  local  council  in  California  sent  his  applica- 
tion for  insurance  to  the  Supreme  Court  of  American  Legion 
of  Honor  at  Boston,  Mass.  The  application  was  returned  to 
the  local  council  for  correction  of  a  clerical  irregularity  in  the 
certificate  of  the  medical  examiner.  The  irregularity  was 
corrected,  and  the  application  again  sent  to  the  supreme 
council.  It  was  never  received  at  the  othce  of  the  supreme 
council,  and  no  certificate  was  ever  issued  to  the  member. 
The  secretary  of  the  local  council  wrote  several  times  to  the 
secretary  of  the  supreme  council,  making  inquiries  about  the 
application,  but  received  no  answer.  The  member  soon  after- 
ward died. 

From  the  time  of  sending  on  his  application,  he  was  treated 
as  a  beneiiciary  member  by  the  local  council,  and  was  called 
on  to  pay  assessments  as  other  beneiiciary  members.  He  paid 
three  assessments,  all  that  were  levied,  and  the  money  was 
forwarded  to  the  supreme  secretary.  The  money  was  received 
without  objection,  and  no  notification  was  ever  given  that  he 
was  not  considered  a  beneficiary  member  by  the  supreme 
council  until  after  his  death. 

A  by-law  of  the  society  provided:  "Applicants  will  not 
be  subject  to  assessments  or  entitled  to  benefits  until  their 
examinations  are  approved,  but  will  become  beneficiary  mem- 
bers on  the  day  of  the  approval  by  the  medical  examiner  in 
chief,  and  they  must  be  credited  with  their  assessments  on  the 
date  of  approval,  as  above." 

The  Superior  Court  of  San  Francisco,  in  deciding  the  case, 
says: 

"  The  certificate  is  not  the  contract.  It  is  only  evidence  of 
it.  The  medical  examiner-in-chief  has  no  right  to  arbitrarily 
reject  'an  application  made  in  good  faith,  and  after  compliance 
with  the  requirements  of  defendant.  He  has  no  power  to 
change  the  by-laws.  He  is  merely  an  executive  officer,  author- 
ized to  see  that  applicants  are  qualified.  In  this  case  it  is  con- 
ceded that  the  applicant  w^as  qualified  in  every  respect.  It  was 
the  duty  of  the  examiner  in  chief  to  approve  the  application. 
'  That  which  ought  to  have  been  done  is  to  be  regarded  as 

'  See  May  on  Ins.,  pages  64-71, 
526;  Fried  v.  Royal  Ins.  Co.,  50 
N.  Y.,  243. 


Chap.  10,  §170.]  cektificate.  203 

done,  in  favor  of  him  to  whom  and  against  him  from  whom  per- 
formance is  due.'     This  is  a  favorite  maxim  of  the  law."  ' 

§  169a.    Delay   of  society  in  issviing-  certificate. 

In  Misselhorn  v.  Mutual  Reserve,  etc.,  30  Fed.  Hep.,  545,  Judge 
Brewer  says:  "While  receipt  of  the  application  may  cast 
a  moral  duty  upon  the  company  to  act  promptly,  yet  delay 
does  not  operate  in  the  same  way  as  an  acceptance  of  the 
application.  Suppose  the  company  had  delayed  acting  for  a 
year,  could  it  be  claimed  that  the  policy  was  in  force?  The 
proposition  which  the  applicant  made  was  for  a  policy  to 
become  operative  when  the  instrument  was  executed  and 
delivered.  No  negligence,  no  delay,  reasonable  or  unreason- 
able, on  the  part  of  the  insurance  company,  could  make  a  con- 
tract in  face  of  the  stipulation."  ^ 

Where  a  person  made  application  for  insurance,  and  the 
application  set  out  that  the  policy  would  not  take  effect  until 
the  membership  fee  was  paid,  but  the  agent  of  the  society  told 
the  applicant  that  he  could  pay  the  fee  either  at  that  time,  or 
when  the  policy  was  delivered,  and  the  applicant  elected  to  pay 
at  the  latter  time,  but  died  before  the  policy  was  received,  it 
was  held  that  the  policy  never  took  effect,  and  the  insurer  was 
not  liable.* 

§  170.     Delivery    of     certificate     to    iiieinber. 

Delivery  of  a  certificate  to  an  agent  of  the  society  for  delivery 
to  a  member  is  a  completed  delivery,  although  the  agent  never 
in  fact  delivered  it. 

A  supreme  lodge  executed  a  certificate  of  membership  and 
sent  it  to  a  subordinate  lodge  to  be  countersigned  by  the  sub- 
ordinate lodge,  as  required  by  the  by-laws,  and  delivered  to 
the  ineml)er.  It  was  not  countersigned  or  delivered  to  the 
member,  but  was  in  the  custody  of  the  subordinate  lodge  when 
the  member  died. 

The  question  for  the  court  to  decide  was,  whether  the  cer- 
tificate was  so  far  perfected,  in  accordance  with  the  laws  of 
the  order,  as  to  entitle  the  beneficiary  to  recover  the  fund. 

The  court  said:  "  It  is  manifest  that  the  only  object  of  the 
countersigning  would  be  to  show  that    the    certificate    had 

'  Oliver  v.  Am  L.,  of  Honor,  10  ^  Ormond  v.  Fidolity  Life  Associa- 
r.  C.  L.  Journal,  481 ;  Am.  L.  Rev.  tion,  96  N.  C.  158;  1  8.  E.  Hep.,  796. 
1883,  p.  301.  See  chapter  XIII.' 

'  See  Kohen  v.  Mutual  Reserve, 
etc.,  28  Fed.  Rop.,70r) ;  K.  and  L.  of 
Honor  v.  Grace,  60  Texas,  569. 


204  CERTIFICATE.  [ChAP.  10,  §171. 

reached  the  member  by  the  regular  channeL  It  was  not 
intended  and  could  not  give  additional  force  to  the  agreement 
of  the  supreme  lodge  to  pay  the  money.  It  imposed  no  obli- 
gation or  duty  upon  the  subordinate  lodge,  nor  did  it  in  anyway 
indicate  the  direction  or  want  Of  direction  on  the  part  of  (the 
member).  It  was  nothing  more  than  the  performance  of  a 
duty  required  by  a  principal  from  his  agent,  to  show  that  the 
agent  had  performed  a  ministerial  act.  *  *  *  Upon  what 
principle  should  an  accident  which  prevented  countersigning 
and  actual  delivery  to  (the  member)  relieve  the  supreme  lodge 
from  the  performance  of  their  contract?  Delivery  to  an  agent 
for  delivery  to  a  party  in  interest  is  a  completed  delivery 
from  the  time  the  agent  has  received  the  instrument.  The 
principal  cannot  take  advantage  of  the  failure  of  the  agent  to 
perform  an  act  over  which  the  party  having  the  beneficial 
interest  has  no  control."' 

§  171.     Construction  of  contract  of  insurance. 

Ordinary  policies  of  life  insurance  are  held  to  be  contracts 
between  the  company  and  the  beneficiary  named  in  it. 

But  unless  special  provisions  of  the  charter,  by-laws  or  cer- 
tificate of  membership  require  such  a  construction  to  be  given 
to  a  contract  of  mutual  benefit  life  insurance,  it  will  be  con- 
strued to  be  a  contract  between  the  society  and  the  member 
insured. 

The  construction  to  be  given  to  the  contract  of  mutual  benefit 
life  insurance  arises  from  the  plan  of  insurance  and  the  object 
of  the  societies.  The  benefit  fund  provided  for  is  small,  and 
is  variously  limited  in  the  different  societies  at  from  one  thou- 
sand to  five  thousand  dollars.  It  is  the  theory  of  this  plan  of 
insurance  that  it  is  "  the  poor  man's  insurance," — that  it  is 
given  for  exactly  what  it  costs, — that  there  are  no  unnecessary 
expenses, — that  the  benefit  fund  shall  go  to  the  family  and 
dependents  of  the  member  in  such  a  manner  as  he  may  desire 
it  to  go,  not  only  when  he  takes  out  the  certificate,  but  at  any 
time  afterward  when  changes  shall  have  taken  place  in  his 
family;  and  it  is  designed  that  changes  in  the  designation  of 
those  whom  he  shall  desire  to  be  the  objects  of  his  provision, 
may  be  made  by  the  act  of  the  member  at  any  time,  without 
other  expense  or  formality  than  such  as  may  be  prescribed  by 
the  laws  of  the  .society  issuing  the  contract  of  insurance." 

'  Supreme  Lodge  K.  of  H.,  12  Ins.  ^  See  Designation  of  Beneficiary — 
Law  Journal  628.  Chapter  XII,  part  1. 


Chap.  10,  §171.]  certificate.  205 

As  the  contract  of  mutual  benefit  insurance  is  between 
the  society  and  tlie  meml>er,  it  follows  that  a  minor  may  not 
be  admitted  to  meml)ersliip,  unless  the  organic  law  of  the  soci- 
ety expressly  authorizes  minors  to  become  members. 

The  provisions  of  a  life  insurance  policy  are  construed  and 
applied  like  the  terms  of  any  other  contract.' 

A  policy  of  life  insurance,  while  not  an  evidence  of  debt  for 
the  absolute  payment  of  money,  is  a  chose  in  action  governed 
by  the  principles  applicable  to  other  agreements  involving: 
pecuniary  obligations.^ 

Certiticates  of  membership  in  mutual  benefit  societies  are,  in 
elt'ect,  policies  of  life  insurance,  and,  in  most  respects,  are  gov- 
erned by  the  same  rules  which  prevail  in  policies  of  insurance  " 

The  stipulations  of  a  written  contract  are  not  the  less  bind- 
ing because  made  between  a  corporation  and  one  of  its  mem- 
bers; nor  are  the  rules  of  construction  in  such  cases  different 
from  those  which  obtain  in  contracts  between  corporations  and 
strangers.'' 

It  has  been  frequently  held  that  where  parties  have,  by  their 
own  acts,  placed  a  construction  upon  doubtful  and  ambiguous 
provisions  of  a  contract  of  insurance,  the  courts  will  carry  that 
construction  into  effect.^ 

But  the  construction  given  to  any  of  the  provisions  of  the 
contract  of  insurance  by  the  officers  of  the  society  is  not  bind- 
ing upon  the  courts,  and  the  members  cannot  be  bound  by  any 
acts  that  may  have  been  done  by  tliem  under  such  a  construc- 
tion." 

In  Wiggin  v.  Knights  of  Pythias,  sxijpra^  the  court  says: 

"These  word^  of  the  by-laws  become  part  of  the  contracts  for 
life  insurance,  and,  in  the  courts,  must  receive  the  ordinary 
interpretation  put  upon  the  contracts  containing  them.  *  *  -5^  *  * 

These  benevolent  associations  or  fraternities,  not  more  than 
other  parties  to  contracts,  cannot  be  allowed  to  construe  the 
words  they  use  in  making  agreements  otherwise  than  accord- 
ing to  their  plain  and  unambiguous  meaning,  in  the  English 
language  they  employ,  whether  the  words  of  the  contract  itself 
or  of  the  rules  and  regulations  which   become,  by  the  prin- 

'  Conn.  Mut  etc.  v.  Pyle,  Ohio.  4  '  Ins.  Co.  v.  Dntcher  et  al.  95  U. 
N.  E.  Rep.  465.  S  26!). 

*  Hutson,  V.  Merrifield,  51  Ind.  24.         '  Manson  v.  Grand  Lodge  etc.  30 

*  Elkhart  Mut.  Aid  etc.  V.  Hough-  Minn.  509.  Wiggin  v.  Knights  of: 
ton,  98  Ind.  149.  Pythias,  31  Fed.  Rep.  122. 

*  Willcuts  V.  N.  W.  Mutual  etc, 
81  Ind.  300;  New  England  Mutual 
etc.  V.  Butler,  34  Me.  451. 


206  CERTIFICATE.  [Chap.  10,  §172. 

ciples  they  insist  on,  embodied  in  the  contract  as  a  part  of  it. 
They  cannot  be  permitted  to  interpret  tlie  contract  as  they 
please,  and  become  their  own  judges  of  what  they  mean  by  tlie 
use  of  the  words  employed  that  have  either  a  technical  or  well 
defined  signification,  known  of-  all  men  who  use  the  language. 
Legislatures  and  parliaments  cannot  do  that,  and  even  they 
are  bound  by  the  common  meaning  of  the  words  they  use  in 
their  statutes  which  become  part  of  a  contract." 

The  law  governing  the  distribution  of  the  benefit  fund  is  to 
be  found  in  the  constitution,  by-laws  and  certificates  of  the 
society,  but  when  a  dispute  arises  as  to  the  interpretation  of 
that  law,  the  law  of  the  domicil,  and  not  that  of  the  place 
where  the  property  may  chance  to  be,  governs  such  interpre- 
tation. 

§  17'^.  Same  subject  continued.  The  certificate 
and  by-laws  should  be  construed  liberally,  and  M'ith  a  view  to 
effectuate  the  contract. 

Where,  in  a  certificate  of  membership,  there  are  two  incon- 
sistent stipulations  covering  the  same  subject  matter,  the  one 
general  and  providing,  among  other  things,  that  upon  certain 
conditions,  the  policy  shall  become  absolutely  void,  and  the 
other  separate  and  distinct,  and  providing,  upon  the  very  same 
conditions,  that  the  society  may,  by  proper  steps,  avoid  the 
policy,  the  latter  stipulation  will  govern. 

Thus,  a  specific  stipulation  in  a  separate  clause  of  a  certifi- 
cate of  membership,  providing  that  if  the  assured  shall  become 
intemperate  to  a  certain  degree,  the  society  may  cancel  the 
policy,  and  thus  absolve  itself  from  liability,  will  control  a  gen- 
eral stipulation  that  such  a  degree  of  intemperance  shall  work 
an  absolute  forfeiture.' 

Where  the  certificate  of  membership,  or  by-laws  contain  in- 
consistent or  contrary  provisions,  that  construction  or  provis- 
ion most  favorable  to  the  assured  will  be  adopted.' 

In  Burkhard  v.  Travelers  Ins.  Co.,  102  Pa.  St.  262,  it  is 
said : 

"  When  a  party  nses  an  expression  of  his  liability  having 
two  meanings,  one  broader  and  the  other  more  narrow,  and 
each  equally  probable,  he  cannot,  after  an  acceptance  by  the 
other    contracting    party,  set   up    the   narrow  construction." 

'  N.  W.  Mutual  etc.  v.  Hazelett,  Ind.  1 ;  National  Bank  v.  Ins.  Co.  95 
105  Ind  212;  4  N.  E.  Kep.  582.  U.  S.  673. 

■^  Supreme    Lodge   v.   Abbott,  82 


■Chap.  10,  §173.]  certificate.  207 

§  173a.  Only  a  stern  legal  necessity  will  induce  such 
a  construction  as  will  nullify  the  contract  of  insurance.' 

AYhere  in  the  body  of  a  certificate  of  membership,  reference 
is  made  to  the  indorsements  on  the  back,  they  may  be  con- 
sidered in  connection  with  the  policy,  in  determining  when  the 
certificate  is  payable,  where  that  is  left  doubtful  in  the  body  of 
the  instrument. 

AVhere  such  a  certificate  was  endorsed:     "Mutual  assurance 

on  the  life  of Due  at  the  death  of  members  $1.00," 

and  the  body  of  the  certiiicate  contained  expressions  such  as, 
should  the  assured  "come  to  his  death  by  the  hands  of  the 
law"  or  "should  die  by  suicide,  or  without  heirs  or  assigns"  only 
$50.00  should  be  paid,  it  was  held  that,  taking  into  considera- 
tion these  expressions,  with  the  indorsements,  the  intention 
was  manifest  that  the  policy  was  to  become  due  on  the  death 
of  the  assured." 

Questions  of  fraud,  warranty,  representation  etc.,  belong 
equally  to  ordinary  life  insurance  and  mutual  assessment  life 
insurance,  and  the  treatment  of  such  questions  is  beyond  the 
scope  of  this  treatise. 

§  173.  Same  subject  coutiuued.  The  by-laws  of  a 
benefit  association  provided  that,  upon  the  death  of  a  member, 
and  in  order  to  make  up  the  amount  to  be  paid  to  his  benefi- 
ciary, each  member  should  pay  one  dollar,  and  that  the  benefi- 
ciary should  be  entitled  to  receive  from  the  association  the 
amount  collected  on  the  assessment  levied  therefor.  In 
construing  these  by-laws,  the  court  held  that  the  beneficiary 
was  only  entitled  to  receive  the  amount  actually  collected  on 
an  assessment  made  for  his  benefit,  and  not  a  sum  e(jual  to  one 
dollar  from  each  member.^ 

In  construing  the  following  clause  in  a  certificate  of  mem- 
bership, "Peter  JN'eskern,  having  complied  with  the  condi- 
tions of  membership,  is  entitled  to  the  benefit  of  said  associa- 
tion, in  the  sum  of  one  dollar  for  each  contributing  member," 
the  court  held  that  "contributing  members,"  and  members  in 
good  and  regular  staTiding  who  had  not  forfeited  their  mem- 
bership, were  synonymous  and  convertible  terms.' 

'  Franklin  Lite  v.  Walliue  93  Ind.  v.   Mutual   Benefit    Association,    43 

7;   Bliss    on    Life    Ins.    at    section  Hun(N.  Y.)()l. 

385.  ^  In  re  La   Solldarite  Mut.    Ben. 

-St.  (;iair  Co.  Ben.   Soc.  v.   Fliet-  Ass'n  (18  Cal.  .'W?. 

sam.  A(lni'r97  111.  474.    See  Hyirnm  ••  Neskf^rn   v.  N.    W.    Endow,   etc. 

V.  .Etna  Ins.  Co.,  11  lowu  31 ;  Wright  Ass'n  ,  30  Minn.  40C. 


208  CERTIFICATE.  [Chap.  10,  gl74. 

Provisions  of  the  constitution  and  by-laws  of  a  benevolent 
society,  allowing  benefits  "  in  case  of  sickness,"  and  ])rovi(ling 
that  when  "  any  member  takes  sick,"  he  shall  be  entitled  to 
benefits,  "  if  it  be  so  that  he  is  not  able  to  attend  to  his  daily 
labor,"  do  not  extend  to  a  case  of  permanent  bodily  injury, 
which  does  not  effect  the  general  health  of  the  person  injured.' 

A  member  of  such  a  society  had  his  thigh  l)one  broken? 
which  caused  a  shortening  of  the  leg  and  the  eversion  of  the 
foot.  For  twenty-six  weeks  the  society  paid  him  his  allowance 
of  $5.00  per  week,  and  at  the  expiration  of  that  time,  to-wit,  on 
Oct.  8,  1877,  refused  to  pay  him  any  further  weekl}'  allowances. 
For  about  sixteen  months  he  was  able  to  do  very  little  work, 
and  could  not  perform  the  duties  of  a  coachman,  as  he  had  done 
for  years  prior  to  his  injury.  On  February  11, 1879,  he  brought 
suit  for  weekly  benefits  from  Oct.  8,  1877. 

The  court  held  that  he  was  not  entitled  to  weekly  benefits 
under  the  constitution  and  by-laws,  as  the  incapacity  to  work,, 
because  of  the  effect  of  the  injury,  was  not  a  sickness  within 
their  meaning.' 

Insanity  has  always  been  regarded  as  a  disease,  and  comes 
strictly  within  the  meaning  of  the  term  "  sickness."  Where, 
therefore,  by  the  laws  of  a  society,  benefits  are  promised  on 
account  of  sickness,  a  member  who  has  become  insane  is  enti- 
tled to  sick  benefits.^ 

§  174.  "In  good  staiicliiig-.  "  In  an  action  upon  a 
certificate  of  membership  for  life  insurance,  reciting  that  the 
deceased  is  a  ''  beneficiary  member  in  good  standing  "  in  a 
benevolent  association,  and  that,  upon  his  death,  a  sum  named 
will  be  paid,  "provided  he  be  in  good  standing  when  he  dies," 
the  certificate  is  proof  of  the  good  standing  of  the  party  named 
at  the  time  it  issued,  and  such  standing  will  be  presumed  to 
have  continued,  in  the  absence  of  contrary  evidence.  In  such 
case,  the  burden  is  on  the  society  to  show  that  by  reason  of  his 
conduct,  or  his  failure  to  comply  with  the  regulations  or 
requirements  of  the  society,  the  deceased  member  had  lost  his 
good  standing.^ 

Where  the  contract  of  insurance  is  issued  upon  the  express 
condition  that  the  member  shall  keep  his  pledge  of  total  absti- 
nence and  comply  with  the  laws  of  the  society,  and  provides 

'  Kelly  V.  A.  Order  of  Hibernians,  ^  Burton  v.  Eyden,  8  Q.  B.  295. 

9  Daly  289.  ^Supreme   Lodge  v.  Johnson,  78 

■^  Kelly  V.  A.  Order  of  Hibernians,  Ind.    110;    Mills    v.    Rebstock,     29' 

supra.  JMinn.  380. 


Chap.  10,  §174.]  certificate.  209 

that  if  he  die  in  good  standing,  his  beneficiary  shall  be  entitled 
to  the  benefit  fnnd,  the  violation  of  the  pledge  of  total  absti- 
nence alone  forfeits  the  right  of  the  beneficiary  to  recover  the 
snni  ]irovided  for.  In  such  case  it  may  be  shown  by  parol 
that  he  violated  his  pledge,  and  the  trial  and  conviction  by  the 
society  for  such  violation  need  not  be  shown  in  order  to  defeat 
a  recovery.' 

Where  the  by-laws  of  an  unincorporated  society  provide  that 
a  member  shall  forfeit  his  rights  in  the  benefit  fund  in 
case  he  shall  neglect  his  Easter  duty  of  confession,  he  is  not  in 
good  standing  unless  he  regularly  performs  such  duty;  and  his 
neglect  of  such  duty  may  be  shown  in  an  action  by  the  bene- 
ficiary on  liis  certificate.^ 

Where  the  constitution  and  by-laws  of  an  unincorporated 
mutual  benefit  society  provide  that  its  members  shall  pay 
dues  and  assessments  for  insurance  according  to  a  certain 
plan,  and  that  each  member  shall  be  a  communicant  in  the 
Roman  Catholic  church,  and  shall  .yearly  go  to  confession  to 
a  priest  of  that  church,  and  receive  the  holy  communion,  which 
provisions  of  the  constitution  and  by-laws  were  well  known  to 
member  at  the  time  he  entered  into  the  contract  of  insurance, 
the  member  must  not  only  pay  his  dues  and  assessments,  in  order 
to  remain  in  good  standing  in  the  society,  but  must  also  per- 
form his  duty  of  confession  and  communion,  or  forfeit  his 
rights  under  the  contract.' 

It  was  urged  in  this  case  that  these  provisions  for  yearly 
confession  and  communion  were  contrary  to  the  constitution 
of  the  United  States,  and  the  constitution  of  the  state  of  Ken- 
tucky, upon  the  subject  of  freedom  of  religious  worship,  but 
the  court  held  that  they  were  clearly  legal  and  valid. 

In  Peoj^le  v.  Benevolent  Society,  24  How.  Pr.,  216,  it  is 
suggested  in  the  opinion  that  provisions  of  a  by-law  requiring 
the  practice  of  religious  duties,  such  as  confession  and  com- 
munion, according  to  the  practice  and  teachings  of  any  par- 
ticular faith,  as  conditions  of  membership  in  an  insurance 
society,  are  not  obligatory  upon  members,  because  thev  are 
contrary  to  the  provision  of  the  constitution  of  the  state  of 
New  York,  Article  I,  Sec.  3  :  "  The  free  exercise  and  enjoy- 
ment of  religious  profession  and  worship,  without  discrim'ina- 

'  Royal  Templars  V.  Curd,  111  111.  ^  Hitter  v.   St.   Aloysius   Society 

284.     ilogins  v.   Supreme   Council,  Kentucky    Court    of    Appeals,   re- 

Cal.;  18  Pacific  Rep.  125.  ported  in  Albany  Law  Journal,  vol. 

'  Matt  V.  Society,  Iowa;  30  N.  W.  27,  p.  431,  but  not  reported  in  Ken- 

Rej).  799.  tucky  Reports. 
14 


210  CERTIFICATE.  [ClIAP.    10,  §175. 

tion  or  preference,  shall  forever  be  allowed  in  this  state  to  all 
mankind."  But  the  decision  is  placed  upon  other  grounds — 
that  the  proceedings  of  expulsion  were  invalid,  and  that  a 
religious  society  could  not  be  organized  under  the  act  provid- 
ing for  the  incorporation  of  cliUritable  and  benevolent  institu- 
tions.' 

§  175.  Suicide.  Where  there  is  no  condition  in  a 
contract  of  insurance,  that  it  shall  be  void  in  case  of  the  death 
of  the  member  by  suicide,  and  the  member  commits  suicide, 
the  society  is  liable  to  the  beneliciary.^ 

In  an  action  on  a  certificate  of  membership,  if  there  be  a 
doubt  whether  the  death  of  the  assured  was  the  result  of 
accident  or  of  suicide,  this  doubt  must  be  solved  in  favor  of 
the  theory  of  accident. 

But  if  the  plaintiff  has,  in  her  proof  of  death,  stated  that  the 
death  was  by  suicide,  it  is  incumbent  on  her  to  satisfy  the 
jury  that  she  was  mistaken  in  this  statement,  and  that  the 
death  was  caused  by  accident.^ 

"Where  the  verdict  of  a  coroner's  jury,  finding  that  the 
deceased  had  come  to  his  death  by  suicide,  was  annexed  to  the 
proof  of  death,  it  was  held  that  the  burden  was  on  the  insurer 
to  prove  the  suicide  of  the  deceased.' 

Where  there  is  uo  evidence  as  to  the  cause  of  the  death  of 
the  assured,  the  presumption  is  that  it  was  from  natural  causes, 
and  not  an  act  of  self-destruction. 

But  where  the  evidence  is  equally  balanced  as  to  whether 
the  death  was  by  suicide  or  not,  it  is  error  to  instruct  the 
jury  that  if  the  evidence  leaves  the  matter  in  doubt,  the  pre- 
sumption is  that  the  death  was  produced  by  natural  causes, 
and  not  by  self-destruction.^ 

In  the  absence  of  evidence  to  the  contraiy,  it  will  be 
presumed  that  death  by  drowning  is  the  result  of  accident,  and 
not  of  suicide.' 

'  The  subject  of  the   loss  of  good  ^  Keels  v.  Mutual,  etc,  Ass'n.,  29 

standing  in  a  mutual  benefit  society  Fed.  Rep.,  198;    Insurance   Co.  v. 

arising  ^rom  non-payment  of  assess-  Newton,  22  Wall.,  38. 

ments,  is  treated  of  in  the   chapter  '' Goldschmidt  v.  Mutual  Life,  etc., 

on  "  Assessments"  under   the  head  102  N.  Y.,  48(i;  7  N.  E.  Rep., 408. 

of  "  Suspension   for   non-payment."  '  Guardian  Mutual,  etc.,  v.  Hogan, 

2  Mills  V.  Robstock,  29  Minn.;  13  80  111.,  47. 

N.  "W.  Rep.  162;   Fitch  v.  Ins.  Co.,  «  Mallory  v.  Travelers  Ins.  Co.,  47 

f)9  N.  Y.,  573 ;  Patrick  v.  Ins.  Co.,  4  N.  Y.,  52 
Hun,  263. 


•Chap.  10,  §176.]  certificate.  211 

§176.  Kuow^n  violation  of  tlie  law.  The  contract 
of  insurance  is  not  to  be  avoided  by  the  mere  fact  that,  at  the 
time  of  his  death,  the  assured  was  violating  the  law,  if  the 
death  occurred  from  some  cause  other  than  such  violation.' 

It  is  sufficient  to  relieve  the  society  if  the  known  violation 
of  law  was  such  as  to  proximately  lead  to  the  death  of  the 
assured  by  bringing  him  into  danger  of  losing  his  life.* 

In  Cluiff  V.  Mut.  Ben.,  etc.,  Co.,  99  Mass.,  317,  it  was  held 
that  in  order  to  avoid  the  contract  of  insurance  on  the  ground 
that  the  insured  died  while  violating  the  law  of  a  state,  the 
company  must  prove  that  the  assured  died  while  engaged  in  a 
voluntary  criminal  act. 

This  decision  is  criticised  in  Bradley  v.  Mutual  Ben.,  etc., 
supra^  and  Bloom  v.  Franklin  Life,  etc.,  sujyra,  and  its  sound- 
ness denied. 

In  Bloom  v.  Franklin  Life,  etc.,  supra^  tlie  court  holds  this 
to  be  the  law  :'  "  A  known  violation  of  a  positive  law,  whether 
the  law  is  a  civil  or  a  criminal  one,  avoids  the  policy,  if  the 
natural  and  reasonable  consequences  of  the  violation  are  to 
increase  the  risk;  a  violation  of  law,  whether  the  law  is  a  civil 
or  a  criininal  one,  does  not  avoid  the  policy,  if  the  natural  and 
reasonable  consequence  of  the  act  does  not  increase  the  risk." 

A  person  insured  in  a  mutual  benefit  society,  entered  the 
office  of  the  state  treasurer,  obtained,  by  a  show  of  arms,  a 
sum  of  money,  and  was  shot  and  killed  while  making  his 
escape,  but  before  he  had  reached  the  outer  door  of  the  capi- 
tol.  It  was  held  that,  as  he  had  obtained  the  money,  and  was 
making  his  escape  when  shot,  he  was  not,  at  the  instant  of 
death,  violating  any  law,  so  as  to  forfeit  a  certificate  of  mem- 
bershi])  containing  a  clause  providing  for  a  forfeiture,  in  case 
the  insured  should  "die  while  violating  any  law."  ^ 

A  policy  contained  a  provision  rendering  it  void,  if  the  in- 
sured should  die  "  in  consequence  of  his  violation  of  any  law." 
The  insured  was  killed  by  H.  shortly  after  having  illicit 
intercourse  with  the  wife  of  II.,  and  it  was  held  that,  even  if 
the  act  of  the  Insured  was  a  violation  of  tlie  law,  he  did  not 
die  in  consequence  of  it,  within  the  meaning  of  the  policy,  and 
the  policy  was  not  avoided  thereby.* 

'  Griffin  v.  West.  Mut.  Ben.  Ass'n,  Ind  ,  478;  In,surance  Co.  v.  Seaver, 

20  Neb.,  620;  31  N.  W.  Rep.,  122;  86  U.  S..  531. 

Harper'.s  Admr  v.  Plicenix  Ins  Co.,  ^  Griffin  v.  Western'  Mutual   etc, 

19    Mo.,  506;    Bradley  v.  Mut.  Ben.,  Neb.;  N.  W.  Rep.  122. 

etc.,  45  N.  Y.,  422;  ^lurray  V.  N.  Y.  ••  Goetzmann  v.  Conn.   Mut.   Life 

Life,  etc.,  !)6  N.  Y. ,  614.  Ins.  Co..  5  Thompson  &  Cooli  (N.  Y. 

'  Bloom  V.   Franklin  Life,  etc,  97  Supreme  Ct.)  572. 


CHAPTER  XI. 


Who  May  be  Beneficiary — Insurable  Interest. 
Part  I. 


Sec  177.  Generally. 

Sec.  178.  When  a  stranger  may  be  a  beneficiary. 

Sec.  179.  When  a  stranger  may  not  be  a  beneficiary. 

Sec.  180.  "  Family  "  of  member, 

Sec.  181.  ''Wife"  of  member. 

Sec.  183.  "  Benefiting  and  aiding  family." 

Sec.  183.  "  Widows'  and  orphans'  fund  "— effect  of  provision. 

Sec.  184.  Fund  payable  as  member  may  direct. 

Sec.  185.  When  fund  is  not  payable  to  the  estate  of  deceased  member. 

Sec  186.  Heirs  of  deceased  member. 

Sec  187.  Creditor  of  member. 

Sec.  188.  "  Legal  representatives." 

Sec  189.  Effect  of  amendment  of  organic  law  on  insurable  interest. 

Sec.  190.  Divorced  wife. 

§  177.  Generally.  It  is  well  settled  that  a  policy  of 
insurance,  taken  out  on  the  life  of  another  by  a  beneliciary 
who  has  no  pecuniary  interest  in  the  continuance  of  the  life 
so  insured,  is  a  wagering  contract  and  void. 

This  rule  is  as  applicable  to  a  contract  of  insurance  issued 
bv  a  mutual  benefit  society  as  to  those  issued  by  ordinary  insur- 
ance companies. 

A  person  may,  of  his  own  accord,  insure  his  life,  pay  the 
premiums  himself,  and  make  the  policy  payable  upon  his 
death  to  a  third  person  who  has  no  insurable  interest  in  his 
life.     But  while  the  weight  of  authority  is  strongly  in  favor  of 

'Elkhart  Mutual,  etc.  V.  Houghton  Life  Insurance  Co.     v.     France,  94 

98  Ind.  149.  U.S.  561;  Provident  Life  etc.  v.  Baum, 

"^  Bliss  on  Insurance,  Sec.  26 ;  29  Ind.  236 ;  Elkhart  Mut.  etc.  v. 
Johnson  et  al  v.  Van  Epps,  110  111.  Houghton,  108  Ind.  286;  Campbell 
551;  Lemon  v.  Phoenix  M.  L.  Ins.  v.  N.  E.  Mut.  etc.,  98  Mass.  381; 
Co,  38  Conn.  294;  Rawls  v.  Life  American  etc.  Ins.  Co.  a'.  Robert- 
Ins.  Co.,  27  N.  Y.  282;  Olmsted  v.  shaw,  26  Pa.  St.  189;  Fairchild  v. 
Keys,  85  N.  Y.  597;  Fairchild  v.  N.  E.  Mut.  etc.  51.  Vt.  624; 
Allen,  11  R.  I.,  439;  Conn.  M.  L.  etc.  Langdon  v.  Union  Mut.  etc.,  14 
V.  Schaefer,  94    U.   S.  457;   JEtna  Fed.  Rep.  272. 

(212) 


Chap.  11,  §178.]         insurable  interest.  213 

this  principle,  and  while  contracts  of  insurance  in  mutual 
benefit  societies  are,  in  many  respects,  governed  by  the  same 
principles  as  ordinary  policies  of  insurance,  it  by  no  means 
follows  that  a  member  of  a  mutual  benefit  society  may  make 
his  certificate  payable  to  one  having  no  insurable  interest  in 
his  life. 

The  law  under  which  the  society  is  organized,  the  by-laws, 
rules  and  regulations  not  inconsistent  therewith,  govern  this 
matter,  and  must  be  looked  to  in  order  to  determine  who  may, 
or  may  not,  become  beneficiaries. 

§178.    When  stranger  maybe  beneficiary.     In 

Bloomington  Mutual  etc.  v.  Blue,  120  111.  121;  11  N.E.  Eep. 
331,  it  was  held  that,  as  the  laws  of  Illinois  provided  for  the 
organization  of  life  insurance  companies  upon  the  assessment 
plan,  to  furnish  indemnity  or  pecuniary  benefits  to  devisees  or 
legatees  of  members,  as  well  as  to  their  widows,  orphans,  etc., 
and  a  member  might,  under  the  charter,  devise  the  benefits  of 
his  policy  to  a  stranger,  so  he  might,  in  the  first  instance,  take 
out  the  policy  payable  to  a  stranger. 

In  Indiana,  the  act  of  1883,  providing  for  the  incorporation 
of  mutual  assessment  associations,  does  not  designate  who  may 
become  beneficiaries,  and  it  was  held,  in  that  state,  that,  as  a 
person  has  an  insurable  interest  in  his  own  life,  which  he  may 
insure  for  the  benefit  of  another,  a  member  might  take  out  a 
policy  in  such  an  association,  and  make  it  payable  to  one  who 
had  no  insurable  interest  in  his  life.' 

A  society  was  organized  under  chapter  267  of  Laws  of  New 
York  of  1875,  entitled — "An  act  for  incorporation  of  societies 
or  clubs  for  certain  lawful  purposes."  The  certificate  of  incor- 
poration stated  the  object  of  the  corporation  to  be  "  to  combine 
tlie  efforts  of  all  its  members,  with  the  view  to  effect  mutual 
relief,  etc.,  during  their  lifetime,  or  to  their  respective  families 
from  time  to  time  when  rendered  necessary  by  sickness  or  dis- 
tress." The  by-laws  declared  the  specific  object  of  the  society 
to  be  for  the  mutual  protection  of  its  members,  and  to  furnish 
aid  to  a  member's  family  or  assigns,  in  case  of  his  death. 

It  was  held  that  the  society  could  not  escape  the  payment 

'  Elkhart  Mut.  Aid  etc.  v. 
Houghton,  103  Ind.  286;  2  N.  E.  R. 
763. 


214  INSURABLE    INTPJREST.  [ChAP.  11,  §179. 

of  a  stipulated  sum  to  a  person  because  he  was  not  a  member 
of  the  family  of  the  deceased.' 

A  provision  of  the  constitution  of  a  society,  declaring  that 
the  object  of  the  society  is  to  "afford  financial  aid  and  benefit 
to  the  widows,  orphans  and  heirs  or  devisees  of  the  deceased 
members  of  the  order,"  will  not  necessarily  restrict  the  holder 
of  a  certificate  to  tlie  selection  of  a  beneficiary  from  among  the 
members  of  his  own  family.* 

The  articles  of  incorporation  of  a  benefit  society  pro- 
vided that  the  object  of  the  society  was  "  to  provide  benevo- 
lence and  charity  by  establishing  a  widows'  and  orphans' 
fund,  from  which,  on  satisfactory  evidence  of  the  death  of  a 
member,  *  *  *  *  a  sum  not  exceeding  $2,000.00  shall  be  paid 
to  his  family,  or  as  he  may  direct." 

The  court  held  that  this  provision  did  not  restrict  the  des- 
ignation of  the  beneficiary  to  members  of  the  family  of  a 
member,  and  that  the  member  had  an  absolute  power  to  des- 
ignate the  beneficiary." 

§  179.  When  a  stranger  may  not  be  a  bene- 
ficiary. In  Ohio,  the  law  provided  for  the  organization  of 
mutual  benefit  societies  "  for  the  payment  of  stipulated  sums 
of  money  to  the  families  or  heirs  of  deceased  members." 

A  certificate  of  membership  in  a  society  organized  under 
this  law  was  issued,  payable  to  the  assured  member,  "  or  any 
person  designated  by  his  will,  or  his  heirs  if  no  person  is  des- 
ignated herein,  or  by  will."  It  was  held  that  the  assured  was 
not  thereby  authorized  to  constitute  by  testamentary  appoint- 
ment, as  beneficiary  of  such  insurance,  a  person  who  was  not 
of  the  family  of  the  assured,  or  who  would  not,  upon  his 
death,  become  his  heir.' 

The  law  of  Michigan  authorizes  the  oro^anization  of  societies 
to  secure  "  to  the  family  or  heirs  of  any  member,  upon  his 
death,"  a  certain  sum  of  money.  This  language  of  the  law 
excludes  as  beneficiary  a  person  who  is  not  related  to  the 
assured,  and  whose  interest  is  not  promoted  by  the  continu- 
ance of  the  life  of  the  assured." 

'  Massey  V.  Rochester  Mut.   etc.,  Martin,' 12  Ins.  L.  Jour.  628. 

102  N.  Y.   523;  7   N.   E.   Kep.  619,  •»  National  Mutual,  etc.  v.  Gonser, 

affirming  34  Hun    254.  43  Ohio  St.  1 ;  1  N  .E.  Rep.  11 ;  State 

"Lamont  v.  Grand  Lodge,   Iowa  v.  Central   Ohio    Mutual,     etc.,    20 

Legion  of  Honor,  31  Fed.  Rep.   177.  Ohio  St.  399:  State  v.  People's  Mut- 

'  Mitchell  V.  Grand  Lodge,  etc.,  70  ual,  etc.,  42  Ohio  St.  579. 

Iowa  360;    30  N.  W.  Rep.  865,   also  ^  Mutual  Benefit,  etc.  v.   Hoyt,  46 

to  same  effect,  Sup.   Lodge,  etc.,  v.  Mich.  473. 


CllAr.  11,  §181,]  INSURABLE   INTEREST.  215 

§180.  "  Family  "  of  iiieiubers.  The  laws  of  Michi- 
gan provide  for  the  organization  of  mutual  benefit  societies  to 
secure  to  "  the  family  or  heirs  of  any  member,  upon  his 
death,"  a  certain  sum  of  money. 

An  old  man  became  a  member  of  a  society  organized  under 
this  act,  and  designated  as  his  beneficiary  a  young  lady  who  was 
not  related  to  him,  but  who  had  lived  with  him  for  many 
years  in  the  same  household,  and  had  been  treated  by  him  as 
if  she  were  his  daughter.  In  deciding  that  such  a  designation 
was  within  the  terms  of  the  above  law,  the  Supreme  Court 
of  Michigan  says: 

"Now  this  word  'family'  contained  in  the  statute,  is  an 
expression  of  great  flexibility.  It  is  applied  in  many  ways. 
It  may  mean  the  husband  and  wife  having  no  children  and 
living  alone  together,  or  it  may  mean  children,  or  wife  and 
children,  or  blood  relations,  or  any  group  constituting  a  dis- 
tinct domestic  or  social  body.  It  is  often  used  to  denote  a 
small  select  corps  attached  to  an  army  chief,  and  has  even 
been  extended  to  whole  sects,  as  in  the  case  of  the  Shakers. 
We  discover  nothing  in  the  statute  implying  a  narrow  sense, 
and  we  should  not  be  inclined  to  attribute  one  where  the 
result  would  cause  injustice.  It  seems  to  us  that  the  circum- 
stances constitute  a  case  within  the  meaning  of  the  legislature.'" 

§  181.  "Wife"  of  meinber.  In  Watson  v.  Centennial 
Mutual  Life  Ass'n.,  21  Fed. Rep. 698,  the  testimony  showed  that 
the  deceased  member  and  the  complainant  had,  for  ten  years 
prior  to  the  death  of  the  member,  lived  together  as  husband 
and  wife,  though  no  marriage  ceremony  had  ever  been  per- 
formed; that  they  lived  together  as  husband  and  wife  continu- 
ously during  those  years,  in  the  same  house,  recognizing  each 
other  as  such,  and  being  so  recognized  by  their  friends  and 
neighbors,  he  providing  for  her  as  husband,  and  she  taking 
care  of  the  household  duties.  While  in  that  relation,  he  took 
out  an  insurance  in  her  name  as  Mrs.  Kellie  Brooks, 

The  court  held  that  the  mere  name  in  which  he  took  out  the 
contract  of  insurance  did  not  change  the  mutual  relations  of 
the  parties,  that  they  were,  under  the  laws  of  ]\Iissouri,  husband 
and  wife,  and  that  she  had  an  insural)le  interest,  and  could 
maintain  the  action. 

'  Carmichael  v.  The  N.  W.  Mat. 
Ben.  Ass'n,  51  Mich.  494;  See  Fol- 
mer's  Appeal,  87  Pa.  St.  133. 


210  INSURABLE   INTEREST.  [ChAP.  11,  §181. 

The  constitution  of  a  society  stated  its  object  to  be  to  "  pro- 
vide for  the  relief  of  widows,  orphans  and  heirs  of  deceased 
members." 

A  member  designated  his  wife  as  beneficiary,  and  she  paid 
all  assessments  but  two  out  of  her  own  earnings.  After  his 
death,  in  an  action  to  recover  the  sum  due  on  the  certificate 
of  membership,  the  defense  was  that  the  plaintiff  was  not  the 
lawful  wife  of  the  member,  as  he  had  a  wife  living  at  the  time 
of  his  pretended  marriage  to  plaintiff.  It  was  held  that  the 
facts  so  set  u])  did  not  constitute  a  defense  to  the  cause  of 
action.  The  court  says:  "It  may  be  true  that  the  by-law, 
which  prescribes  the  obligation  and  duty  of  the  association,  on 
the  death  of  a  member,  contemplated  a  payment  to  the  person 
who  should  be  the  lawful  widow  of  a  deceased  member.  But 
this  was  not  a  limitation  of  the  power  of  the  company  so  as  to 
prevent  it  from  recognizing  as  the  beneficiary,  a  person  who 
might  be  designated  by  the  member  as  holding  to  him  the 
relation  of  wife.  Such  designation  made  during  the  life-time 
of  the  member  and  assented  to  by  the  company,  until  changed 
by  the  mutual  agreement  of  the  member  and  the  company,  or 
at  least  until  the  arrangement  was  repudiated  by  one  of  the 
parties  thereto,  was  binding.  The  non-disclosure  by  Story 
(deceased  member)  of  the  prior  marriage  was  not  a  fraud  upon 
the  association.  Its  obligation  was  not  in  any  way  enlarged 
by  making  the  plaintiff  the  beneficiary.  Nor  did  the  appro- 
priation of  the  fund  for  her  benefit  contravene  the  policy  or 
objects  of  the  association.  The  plaintiff  had  for  sixteen  years 
lived  with  Story,  believing  herself  to  be  his  lawful  wife.  They 
had  children  dependent  upon  them  for  support.  It  was  a  case 
where  it  was  the  duty  of  Story  to  provide  for  them,  and  the 
provision  he  made  through  this  insurance  was  in  entire  accord 
with  the  object  of  the  defendant's  organization."  ' 

In  the  absence  of  qualifying  circumstances,  the  beneficiary 
intended  by  a  by-law  which  provides  for  the  payment  of  the 
benefit  fund  to  the  widow  of  a  deceased  member,  is  the  lawful 
wife  of  the  member,  in  case  she  survives  him.  Nevertheless, 
it  is  legally  possible  for  a  member  to  designate  as  his  benefi- 
ciary a  woman  with  whom  he  is  living,  although  he  jnay  not 
have  been  legally  married  to  her,  and  if  such  designation  is 

'  Story  V.  Williamsburgh  M.  M.B. 
Association,  95  N.  Y.  474 ;  Durian  v. 
Central  Verein,  7  Daly  (N.  Y.)  168. 


•Chap.  11,  §181.]         insurable  interest.  217 

assented  to  by  the  society,  and  becomes  part  of  the  contract, 
she  may,  after  his  death,  recover  on  the  contract. 

But  in  order  that  the  woman  thus  designated  may  recover, 
she  must  assume  the  burden  of  proof,  and  clearly  establish,  not 
only  that  such  designation  was  made,  but  also  that  it  became 
a  part  of  the  contract. 

Courts  will  not  assist  in  encouraging  concubinage,  and  no 
right  of  a  lawful  wife  or  child  will  be  permitted  to  be  taken 
away,  except  upon  clear  proof. 

The  doctrine  of  Story  v.  The  Williamsburgh  M.  M.  B. 
Association,  95  N.  Y.  474  should  not  be  extended  beyond  the 
substantial  facts  of  that  case.' 

The  evidence  in  an  action  on  a  benefit  certificate  showed 
the  following  facts: 

In  1869,  a  man  married  a  woman  in  London,  and  she  sur- 
vived him  when  he  died  in  1883.  This  man,  in  1882,  repre- 
sented himself  as  a  single  man,  and  became  a  member  of  a 
mutual  benefit  society.  Afterward,  in  1882,  a  marriage  cere- 
mony took  place  between  him  and  another  woman,  the  plain- 
tiff in  the  action,  and  they  thereafter  lived  together  as  man 
and  wife.  The  member  notified  his  lodge  that  he  had  married, 
and  that  his  wife's  name  was  Rebecca.  The  secretary  of  the 
lodge,  in  conformity  with  the  requirements  of  the  by-laws  of 
the  order,  reported  the  facts  so  communicated  to  the  United 
States  Grand  Lodge  of  the  order.  After  this  notification  the 
member  continued  to  pay  dues  which  he  was  required  to  pay 
quarterly,  and  died  in  good  standing  in  December,  1883. 

It  was  held  by  the  court  that  this  evidence  was  not  sufficient 
to  establish  that  plaintiff  had  been  accepted  by  the  society  as 
the  beneficiary  of  the  contract  made  with  the  member,  and 
that  such  acceptance  had  become  part  of  the  contract  to  the 
exclusion  of  the  lawful  wife,  whom  he  had  married  in  1869, 
and  to  whom,  by  the  ])rovisions  of  the  by-laws,  the  benefit 
fund  was  payal)le;  and  it  was  consequently  further  held  that 
a  direction  of  a  verdict  in  favor  of  the  plaintiff"  was  erroneous." 

A  woman  who  is  married  to  a  man,  but  illegally,  because  he 
had  a  former  wife  living  at  the  time,  has  an  insurable  interest 
in  his  life.^ 

But  if  there  is  a  breach  of  warranty,  by  reason  of  the  falsity 

'  Schnonk  v.  I.  O.  Sons  of  Benja-  -Schnook  v.  I.  O.  Sons  of  Benja- 
min, 24  N.  Y.  Weekly  Dii?   348;  21     niin.  supra. 

J.&.  S.  (N.  Y.  Superior  Ot.)  181.  ^  Equitable  etc.  Soc.   v.   Peterson 

41  Ga.  388. 


21S  INSURABLE    INTEKE8T.  [ClIAT.  11,  ^^5182. 

of  the  statement  in  the  application,  that  the  assured  and  the 
beneficiary  are  husband  and  wife,  there  can  be  no  recovery  on 
the  policy.' 

§183.  "Benefiting- and  aiding  family."  A. became 
a  member  of  the  Knights  of  Birmingham,  an  incorporated 
society,  the  charter  of  which  sets  forth  its  object  to  be  "  the 
maintenance  of  a  society  for  the  purpose  of  benefiting  and 
aiding  the  widows  and  orphans  of  deceased  members."  It 
was  provided  in  article  nineteen  of  its  constitution  that  the 
benefit  fund,  at  the  death  of  a  member,  should  '•  be  paid  to 
such  person,  or  persons,  as  the  deceased  may  have  designated 
to  receive  the  same,  as  appears  on  the  books  of  the  lodge  of 
which  he  is  a  member." 

A.  borrowed  the  amount  of  money,  which  the  society  would 
be  liable  to  pay,  at  his  death,  from  his  sister.  He  designated 
her  on  the  books  of  the  lodge  as  the  person  to  whom  payment 
should  be  made  by  the  society,  and  she  paid  his  dues  to  the 
society.  At  the  death  of  the  member,  the  benefit  fund  was 
claimed  by  his  sister,  and  also  by  his  widow  and  children. 

The  Supi'eme  Court  of  Pennsylvania  held  that  the  amount 
due  from  the  society  must  be  paid  to  the  sister  of  the  deceased 
member,  and,  in  the  opinion,  says: 

"  The  learned  court  below  was  of  opinion  that  there  was  a 
fatal  conflict  between  the  charter  and  the  constitution  in 
respect  of  the  persons  w^ho  may  receive  benefits  from  the 
defendant  company,  and  for  that  reason  alone  refused  judg- 
ment to  the  plaintiff  (the  sister).  The  second  section  of  the 
charter,  upon  which  this  conclusion  is  based,  is  in  the  follow- 
ing words:  'The  purposes  of  this  corporation  shall  be 
the  maintenance  of  a  society  for  the  purpose  of  benefiting 
and  aiding  the  widows  and  orphans  of  deceased  members.' 
Construing  these  words,  the  learned  court  below  held  that  it 
was  not  within  the  power  of  the  defendant  to  stipulate  for  the 
payment  of  the  benefits  to  any  person,  other  than  the  widow 
and  orphans,  who  miglit  be  designated  as  the  recipient  by  the 
deceased  under  article  19  of  the  constitution.  We  think  this 
is  too  narrow  and  strained  a  view  to  take  of  the  second  section 
of  the  charter  quoted  above.  While  it  is  true  that  the  general 
purpose  of  the  corporation  is  there  stated  to  be  the  main- 
tenance of   a  society  for   benefiting  and   aiding  widows  and 

'  Holabird  v.  Ins.  Co.  2  Dill.  166;  3 
Ins.  Law  Jour.  588. 


Chap.  11,  §182.]         insurable  interest.  219 

orphans  of  deceased  members,  it  must  be  observed  that  this  is 
only  the  statement  of  a  general  purpose.  It  is  only  the 
recital  of  an  object  sought  to  be  accomplished,  and  which, 
doubtless,  is  accomplished  in  the  great  majority  of  cases,  even 
though  in  exceptional  cases  the  benefits  may,  by  special  con- 
tract, be  paid  to  other  persons  than  the  widow  or  orphans. 
There  is  no  prohibitory  or  restrictive  language  excluding  from 
the  powers  of  the  corporation  the  right  to  contract  specially 
with  the  member  for  the  payment  of  benehts  to  other  ])ersons 
than  his  widow  or  orphans.  Nor  is  such  a  contract  to  be  held 
void  by  reason  of  any  necessary  implication  from  the  language 
of  the  charter.  For  the  widow  and  orphans  may  be  much 
benefited,  and  in  many  ways,  by  a  contract  designating  another 
beneficiary,  as,  for  instance,  if  the  member,  in  his  life  time, 
desiring  to  establish  a  home  for  his  wife  and  children,  which 
they  might  hold  after  his  death,  borrowed  money  for  that 
purpose,  and  so  used  it,  and,  to  secure  the  loan,  designated  the 
lender  as  the  beneficiary  of  his  membership,  certainly  his 
widow  and  orphans  would  be  materially  benefited  by  such  an 
arrangement.  Or  if,  having  a  home,  he  met  with  disaster,  and 
was  about  to  lose  it  by  judicial  sale,  and  should  save  it  by  a 
similar  provision,  his  widow  and  orphans  would  be  thereby 
benefited.  Or  if,  having  property  and  also  debts,  but  not  to 
the  point  of  insolvency,  he  could  borrow  money  by  means  of 
a  membership  with  such  an  association,  and  he  should  become 
a  member  for  that  ver}^  purpose,  the  creditor  possibly  paying 
the  dues,  and  he  could  to  that  extent  diminish  his  indebted- 
ness during  his  life,  and  thus  leave  that  much  more  of  his 
property  to  his  widow  and  orphans,  undoubtedly  they  would 
be  thereby  benefited.  Or  he  might  borrow  the  money  and  give 
it  dii-ectly  to  his  wife  or  children  during  his  life,  pledging 
his  membership  to  the  lender  as  above,  and  then  also  they 
would  receive  the  full  advantage  of  the  transaction  without 
waiting  until  his  death.  Many  more  illustrations  of  a  similar 
character  might  easily  be  suggested,  but  it  is  unnecessary. 
They  all  prove  the  same  proposition,  to  wit,  that  it  is  entirely 
possible  to  benefit  the  widow  or  orphans  by  means  of  such  a 
membership,  though  neither  of  them  is  the  designated 
beneficiary,  and  hence  there  is  no  necessary  conflict  between 
the  second  section  of  the  charter  and  the  nineteenth  article  of 
the  constitution. 

But  again  the  member  may  be  unmarried,  or  he  may  have 
become  a  widower  and  without  children  during  his  life,  though 


■220  INSURABLE    INTEREST.  [ChAP    11,  §183. 

at  the  time  his  membership  commenced,  he  may  have  had  both 
a  wife  and  children.  Surely,  in  such  a  case,  it  would  not  be 
contended  that  the  company  could  resist  payment  if  the 
action  were  brought  by  an  administrator,  even  though  the 
money  was  needed  only  for  the  payment  of  debts,  or  if 
brought  by  a  designated  beneliciai-y,  who  had  loaned  money 
on  the  faith  of  the  membership.  Further  discussion  does  not 
seem  to  be  required.'" 

§  183.  "Widows'  and  orphans'  fund"— effect  of 
l>rovision.  In  Highland  v.  Highland,  109  III,  366,  it  is 
said :  "  It  is  urged  that,  by  the  terms  of  the  charter  or  act  of 
incorporation  of  the  order,  the  fund  out  of  which  appellee 
seeks  payment  is  established  as  a  '  widows'  and  orphans'  ben- 
eiit  fund,'  which  is  sacred  to  the  relief  of  widows  and 
orphans,  and  that  it  is  not  in  the  power  of  the  member,  or  of 
the  lodge,  or  both,  to  alter  or  defeat  the  right  of  those  wlio,  by 
the  charter,  are  declared  to  be  the  beneliciaries.  The  charter, 
among  the  objects  of  the  corporation,  declares  to  be:  'To 
promote  benevolence  and  charity,  by  establishing  a  widows' 
and  orphans'  benefit  fund,  from  which,  on  the  satisfactory 
evidence  of  tlie  death  of  a  member  of  the  corporation,  who 
has  complied  with  its  lawful  requirements,  a  sum  not  ex- 
ceeding iive  thousand  dollars  ($5,000.00)  shall  be  paid  to  his 
family,  or  as  he  may  direct.'  It  is  insisted  that  this  makes 
the  primary  object  to  be  the  establishment  of  a  widows'  and 
OTjyhans'  fund,  and  that  it  is  only  in  the  absence  of  a  family 
that  the  member  may  direct  to  whom  the  benefit  shall  be  paid, 
or  at  least,  where  there  be  a  family,  that  the  power  of  direction 
is  limited  to  naming  the  proportions  in  which  the  fund  shall 
be  divided  among  them.  No  doubt  it  is  an  object  to  provide 
a  widows'  and  orphans'  benefit  fund,  and  it  will  remain  as 
such  a  fund,  unless  the  member  directs  to  the  contrary.  But 
notwithstanding  the  description  as  a  '  widows'  and  orphans' 
benefit  fund,'  it  is  equally  the  purpose  that  the  member  should 
have  the  power  of  directing  to  whom  payment  of  his  benefit 
should  be  made,  as  that  the  fund  is  to  be  for  the  benefit  of  his 
family.  The  language  that  the  sum  shall  be  paid  to  the  mem- 
ber's '  family,  or  as  he  may  direct,'  gives  to  him,  in  the  most 
plain  terms,  the  power  of  absolute  direction  to  what  person  or 
persons  the  payment  shall  be  made.     Evidently  the  language 

'  Maneely  v.  Knights  of  Birming- 
ham, 115  Pa.  St.  305;  9  Atl.  Rep,  41. 


Chap.  11,  §185.]         insurable  interest.  221 

of  the  charter  will  not  bear  the  construction  which  appellant's- 
counsel  would  place  upon  it."  ' 

§  184.    Fund  payable  as   iiieiiiber  may  direct. 

Where  the  charter  provides  for  the  payment  of  a  sum  of 
money  upon  the  death  of  a  member  "  to  his  family,  or  as  he 
may  direct,"  the  member  may  direct  as  his  beneliciary,  any 
person,  whether  a  member  of  iiis  family  or  not.'^ 

§  185.    When  fund  is  not  payable  to  estate  of 

deceased  member.  Where  the  object  and  purpose  of  the 
society  is  to  pa}'  "le^^al  heirs  and  beneficiaries  "  of  a  deceased 
member  such  sum  of  money  as  may  be  realized  from  an  assess- 
ment, etc.,  the  designation  by  a  member  of  "  my  estate  "  as 
beneficiary  is  invalid.^ 

In  Daniel's  Ex'r  v.  Pratt  et  at.,  Mass.  10  N.  E.  Rep.  166, 
on  the  death  of  the  testator,  a  deceased  member  of  the  Masonic 
Mutual  Relief  Association  of  Western  Massachusetts,  the 
money  due  on  his  certificate  of  membership  was  paid  over  to 
the  executor  of  the  estate,  without  question  by  the  society. 
A  by-law  of  the  association  provided  that  when  a  member 
should  die,  leaving  no  widow,  child,  mother  or  father,  pay- 
ment should  be  made  to  the  executor.  It  was  held  that  the 
executor  of  the  testator  held  the  fund,  not  as  general  assets  of 
the  estate,  but  for  distribution  according  to  rules  established 
by  the  statutes  of  distribution,  that  the  laws  of  Massachusetts 
regulating  such  corporations  limited  beneficiaries  to  relatives 
of  members,  and  the  designation  by  the  testator  of  his 
"  estate  "  as  his  beneficiary  was  invalid  as  contrary  to  the  laws 
under  which  the  company  was  organized,  which  provide  for 
the  organization  of  societies  "  for  the  purpose  of  assisting  the 
widows,  orphans,  or  other  dependents  of  deceased  members." 

The  same  testator  had  been  a  member  of  a  mutual  benefit 
society,  organized  under  the  laws  of  the  State  of  I^ew  York, 
and  the  same  executor  received  the  endowment  due  from  that 
company,  on  thie  death  of  the  testator,  who  had,  in  his  last  will 
and   testament,  named  his    "estate"  as   his    beneficiary.     It 

'See  also  Highland  v.   Highland,  Ins.  L.  Jour.  (528;    Sabin  v.   Grand 

13  111  App.  510.  Lodge,  26  N.  Y.   Weekly  Dig.    809; 

■^  Gentry  V.  Supreme  Lodge,  K    of  6    N.    Y.   St.   Hep.    151;  Harton  v, 

H.  20  Cent.    Law   Jour.    393;    Ten-  Provident   Mutual,   etc.,   63   N.    H. 

nessee    Lodge    v.    Ladd,   73  Tenn.  535.     Highland  v.  Highland,  109  HI. 

(5    Lea)    716;     Mitchell    v.    Grand  366. 

Lodge,  70  Iowa  360;  30  N.  W.  Rep.  ^  -Basye  v.  Adams,  81  Ky.  371- 
865;  Supreme    Lodge  v.  Martin,   12 


222  INSURABLE    INTEREST.  [ChAP.  11,  §188. 

was  held  that  his  executor,  qualifying  in  Massachusetts  took 
the  fund  for  distribution  according  to  the  terms  of  the  will — 
it  not  appearing  that  the  statutes  of  New  York  made  any  lim- 
itation as  to  who  should  be  beneticiaries. 

§  186.     Heirs  of  deceased  luenibers.     Mass.  Pub. 

St.  chap.  115,  provides  that  an  association  may  be  organized 
under  said  chapter,  "for  the  purpose  of  assisting  the  widow, 
orphans,  or  other  dependents  of  deceased  members."  A  cor- 
poration organized  under  this  chapter  provided  in  its  by-laws 
that  the  benelit  fund  should  be  paid  "■  to  the  person  designated 
by  the  member  in  his  application  for  membership,  or  last  legal 
assignment,  provided  such  person  or  persons  are  heirs  or  mem- 
bers of  decedent's  family,"  and  that,  "  if  the  designator  leave 
no  widow  or  children  or  assignee,  then  it  shall  be  payable  to 
his  heirs."  The  supreme  court  of  Massachusetts  held,  that 
the  word  "  heirs  "  in  such  by-law  is  used  in  its  limited  sense, 
to  designate  such  persons  as  would  be  the  legal  heirs  or  dis- 
tributees of  the  deceased  member  at  the  time  of  his  application 
or  designation;  and  that  where,  in  his  application  for  mem- 
bership, a  member  designated  liis  wife  as  the  person  to  whom 
the  benefit  was  to  be  paid  upon  his  death,  and  later  attempted 
to  change  the  designation  from  his  wife  to  his  mother,  who 
was  not  living  with  him  as  a  member  of  his  family,  and  was 
not  dependent  upon  him,  the  attempted  designation  to  his 
mother  was  illegal  and  invalid,  as  the  mother  was  not  one  of 
those  who  would  be  one  of  the  member's  heirs.' 

§  187.     Creditor   of   meiiiber.     A  person  whose  only 
■  relation  to  the  deceased  member  is  that  of  a  creditor,  is  not  a 
person  dependent  upon  him,  within  the  meaning  of  the  above 
statute,  and  the  promise  to  pay  the  creditor  is  void.= 

§  188.  Leg-al  representatives.  The  object  of  an 
association,  as  declared  by  its  charter,  was  "  to  provide  and 
maintain  a  fund  for  the  benefit  of  the  widow,  orphan,  heir, 
assignee,  or  legatee  of  a  deceased  member." 

A  by-law  provided,  "  If  a  member  has  no  legal  represe?ita- 
tives,  such  sum  of  money  as  they  would  have  been  entitled  to, 
shall  become  the  property  of  the  association." 

The  term  "  legal  representatives  "  in  this  by-law  is  to  be 
taken  as  meaning  those  who  are  legal  representatives  in  the 

'  Elsey  V.  Odd  Fellows  Relief  etc.  '■  Skilliugs  v.  Mass.  Ben.  Associa- 
7  N.  E.  Rep.  844.  tion,  Mass.;  15  N.  E.  Rep.  58G. 


ClIAP.  11,  §189.]  INSURABLE    INTEREST.  223 

contemplation  of  this  charter,  namely,  "  the  widow,  orphan, 
heir,  assignee  or  legatee."  ' 

A  society  incorporated  "  for  the  payment  of  stipulated  sums 
of  money  to  the  family  or  heirs  of  deceased  members  "  is  not 
authorized  to  issue  certilicates  of  membership  payable  to  the 
named  beneficiary  "  or  assigns  " — "  to  himself  or  assignees  " — 
"  to  his  estate  " — "  to  his  executors  or  administrators  "  or  to 
any  person,  whether  a  relation  or  not,  who  is  not  of  his  family 
or  heirs.' 

§  189.     Effect  of  jinieiidinent  of   orgiiiiic    law. 

An  act  authorizing  mutual  benefit  societies  to  insure  the 
lives  of  members  for  the  benefit  of  creditors  does  not  effect  a 
certificate  issued  prior. to  the  act  by  a  society  organized  under 
a  prior  law,  payable  to  the  creditor  of  a  member,  and  which 
was  void  when  issued.  In  order  to  make  such  a  certificate 
valid,  it  must  appear  distinctly  that  the  society  was  such  a 
corporation  as  could  avail  itself  of  the  privileges  of  that  act, 
and,  if  it  could,  that  it  had  done  so.'^ 

But  where  the  law  relating  to  the  classes  of  beneficiaries 
who  may  take  the  fund  of  a  society  has  been  changed  after  the 
organization  of  the  society,  so  as  to  include  other  beneficiaries 
than  those  first- enumerated,  the  designation  by  a  member  of 
a  beneficiary  from  an  added  class  of  beneficiaries  is  a  designa- 
tion to  which  the  society  lias  a  right  to  assent,  and  does  assent 
by  issuing  a  certificate  to  the  member  payable  to  such  bene- 
ficiary. 

A  mutual  benefit  society  was  incorporated  under  a  law  pro- 
viding for  the  accumulation  of  a  fund  "  for  the  purpose  of 
assisting  the  widows,  orphans,  or  other  persons  dependent 
upon  deceased  members."  Afterward  the  law  was  so  amended 
as  to  read  "  for  the  ])urpose  of  assisting  the  widows,  orphans, 
or  other  relatives  of  the  deceased^  or  any  person  dependent  on 
deceased  members."  The  society  did  not  restrict  the  chisses 
of  beneficiaries  allowed  ])y  law,  and  did  not  adopt  the  statute 
amending  the  act  under  which  it  was  incorporated.  A  person 
who  became  a  member  after  the  amendment  of  the  law  desig- 
nated, as  his  beneficiary,  his  mother  who  was  not  then,  or  at 
any  time  afterward,  dependent  on  liim  for  su])])ort.  Siil)se- 
<|uently  the  member  married,  and  died  in  good  staiuling  in 

1  Masonic  Mutual  Relief  Ass'n  v.  pie's  etc.  Ass'n.  42  Ohio  St  ol!). 
McAuley,  2  Macliey  (D.  C.)  70.  ^  8killing-s  v.   Massachusetts  Ben. 

2  State"  V.  Standard  Life  Ass'n.,  38  Ass'n.  Mass.;   15  N.  E.  Kcj).  506. 
Ohio  St.  281 ;  State  e.t  rel.    v.    Pec- 


224  INSURABLE    INTEREST.  [ChAP.  11,  §190' 

the  society,  leaving  his  widow  and  his  mother  surviving  him. 
It  was  held,  under  these  facts,  that  tlie  amending  statute 
needed  no  formal  adoption  by  the  society,  that  the  designation 
of  his  mother  was  such  as  he  pould  legally  make  at  that  time, 
as  the  law  which  permitted  a  relation,  merely,  not  being 
necessarily  a  dependent,  to  be  designated,  was  in  force  when 
he  made  his  designation,  and  that  his  mother  was  entitled  to 
receive  the  fund.' 

§  190.  Divorced  Avife.  It  has  been  held  iu  ordinary 
life  insurance  that  a  policy,  originally  valid,  does  not  cease  to 
be  so  by  the  cessation  of  the  assured  party's  interest  in  the 
life  insured;  that  a  wife,  having  an  insurable  interest  in  the 
life  of  her  husband,  is  not  affected  in  her  right  in  an  insur- 
ance policy  on  his  life,  by  a  decree  of  divorce.^ 

But  where  the  charter  of  a  mutual  benefit  society  declares 
its  object  to  be  "  for  the  purpose  of  defraying  the  expenses  of 
the  sickness  and  burial  of  its  members,  and  rendering  pecun- 
iary aid  to  the  families  of  deceased  members,  or  to  their  heirs," 
the  wife  of  a  member,  who  has  been  designated  by  him  as  a 
beneficiary,  loses  her  rights,  as  such,  by  obtaining  a  divorce 
from  him.^ 

'Massachusetts  Catholic  O.  of  F.  79;    McKee    v.    Ins.    Co.,    28    Mo. 

V.  Callahan,  Mass. :  16  N.  E.  Rep.  14.  388. 

'Bliss  on  Life  Insurance  at  sec-  ^ -pyler  v.  Odd  Fellows   Mut.    Re- 

tion  30 ;  May  on  Insurance  at  section  lief    Ass'n.,    Mass.;   13  N.    E.  Rep- 

107 ;  Ins.   Co.  v.  Schaffer,  94  U.   S.  360. 
457 ;  Ins.  Co.  v.  Dunham,  46  Conn. 


Chap.  11,  gl91.J  beneficiary.  225 


Who  May  Be  Beneficiary.    Part  II. 


Assignment  of   Certificate. 


Sec.  191.     Right  to  assign  mutual  benefit  certificate. 

Sec.  192.  Designation  of  beneficiary  is  not  an  assignment  of  certi- 
ficate. 

Sec.  193.    Equitable  assignment. 

Sec.  194.    Limitation  upon  right  to  assign. 

Sec  195.  Certificate  may  not  be  assigned  contrary  to  laws  of  the 
state. 

Sec.  196.    Where  certificate  provides  that  it  may  be  assigned. 

Sec.  197.     Consent  and  approval  of  society  may  be  required. 

Sec.  198.     Rights  of  assignee. 

Sec.  191.  Kiglit  to  assign  mutual  benefit  certi- 
ficate. It  is  clear  that  a  certificate  of  membership  in  a 
mutual  benefit  society  is  not  assignable,  during  the  life  of  a 
member  to  whom  it  has  been  issued,  to  a  person  not  within 
the  classes  named  as  the  beneficiaries  of  the  society. 

Persons  who  are  not  capable  of  taking  the  fund  by  designa- 
tion as  beneficiaries  in  the  first  instance,  cannot  take  it  indi- 
rectly by  assignment  of  the  certificate.  These  societies  are 
intended  to  render  assistance  to  the  designated  classes  of  per- 
sons, in  a  particular  and  special  method,  and  their  purpose 
would  be  defeated  by  permitting  assignments  of  certificates  to 
be  made  to  other  persons.' 

The  charter  of  a  society  provided,  "  The  business  of  said 
association  shall  be,  to  afford  relief  to  the  widows  and  children 
of  its  deceased  members,  and  to  such  business  it  shall  be  lim- 
ited and  restricted." 

A  policy  issued  by  the  society  was  made  payable  to  the  wife 
of  the  member,  and,  in  case  of  her  death  prior  to  his,  to  his 
children.  Afterward,  the  member  becoming  indebted  to  the 
society  in  a  large  sum  of  money,  assigned  this  policy  to  the 

'Bayse  v.  Adams,  81  Ky.  368; 
Briffgs,  Trustee,  v.  Earl  et  al.  Mass.  1 
N.  E.  Rep.  847. 

15 


226  BENEFICIARY.  [ChAP.  11,  §193. 

society  as  collateral  security  for  the  debt.  In  an  action  on 
the  policy  by  the  children,  it  was  held  that  this  assignment 
was  void,  as  being  in  violation  of  the  charter  of  the  society, 
and  in  contravention  of  the  sole  objects  and  benevolent  pur- 
poses for  which  it  was  organized.' 

In  Lamont  v.  Hotel  Mens'  Mutual  Benefit  Association,  30 
Fed.  Rep,  817,  the  court  held  that  where  the  articles  of  asso- 
ciation and  by-laws  of  a  society  make  the  benefits  payable  to 
the  person  designated  by  the  member  in  his  application  for 
membership,  or  in  iiis  last  will  and  testament,  it  is  competent 
for  such  member  by  his  own  act,  and  with  the  consent  of  the 
society,  at  any  time  before  his  death,  without  the  formalities 
of  a  will,  to  make  a  transfer  and  assignment  of  the  benefit 
fund  from  the  original  beneficiary  named  to  any  other  person 
he  may  select.^ 

After  the  death  of  a  member,  when  the  right  to  the  fund 
has  become  absolute  in  the  beneficiary,  this  right  to  the  benefit 
fund  may  be  assigned  as  any  other  chose  in  action. 

§  193.  Designation  of  beneficiary  not  an 
assignment.  Where  the  charter,  by-laws,  or  certificate  of 
membership  provide  that  the  member  may  designate  his  bene- 
ficiaries by  endorsement  of  their  names  upon  the  certificate,  a 
direction  by  the  member,  written  on  the  back  of  his  certificate, 
that  the  fund  shall  be  paid  to  certain  persons,  is  to  be  regarded 
as  a  designation  of  the  beneficiaries,  and  not  as  an  assign- 
ment of  the  certificate. 

In  such  case,  the  delivery  of  the  certificate  to  the  persons 
named,  is  not  necessary  to  give  them  the  right  to  take  the 
fund.' 

§  193.  Equitable  assignment.  The  doctrine  of 
"  equitable  assignment  "  was  held  to  apply  in  the  following 
case.  A  member  of  "  The  Railway  Conductor's  Mutual  Associa- 
tion," was  insured  by  the  association  in  the  sum  of  $2,500.00. 
The  by-laws  of  the  association  provided  that  this  fund  might 
be  disposed  of  by  will,  and  if  not  disposed  of,  should  belong 
to,  and  be  paid  to  his  widow,  or  in  case  he  left  no  widow,  then 
to  his  legal  heirs  or  representatives. 

'  Dietrich  v.  Madison  Relief  Ass'n  ^  Benevolent  Society  v.  Fleitsam 
45  Wis.  79.  Adm'r,    97    111.    474;    Highland   v, 

-  See  Bloomington  Mutual  etc.  v.     Hinhland,  109  111.  366. 
Bine,   120  111.   121;  11  N.    E.   Rep. 
331. 


■Chap.  11,  §193.]  beneficiary.  227 

By  will,  the  member  gave  the  fund  to  his  two  daughters, 
and  this  will  remained  in  existence  unrevoked  at  the  time  of 
his  death.  About  five  months  before  his  death,  he  wrote  to  his 
wife,  telling  her  that  assessments  upon  his  certificate  were  due, 
in  the  amount  of  $38.00,  and  that  if  she  would  pay  the  assess- 
ments, and  keep  them  paid  up,  the  policy  should  be  hers.  In 
the  letter  he  enclosed  the  following  writing: 

"San  Diego,  Cal.,  Dec.  11,  1877. 
Know  all  men  hij  these  presents,  that  this  is  my  wish, 
made  in  sound  mind,  that  I  revoke  all  former  life  insurance 
policies,  and  do  this  day,  Dec.  11,  1877,  make  my  policy  of 
the  Conductor's  Life  and  Benelit  Association,  read  for  the 
benefit  of  Mrs.  JVI.  A.  Swift  in  case  of  my  death,  and  for  her 
special  benefit  all  that  may  be  derived  therefrom. 

Clark  Swift." 

Upon  the  receipt  of  this  paper,  Mrs  M.  A.  Swift,  the  wife, 
paid  up  the  assessments,  and  soon  afterward  the  member  died. 
The  court  held  that  these  writings,  in  connection  with  the 
action  of  the  wife,  accomplished  a  transfer  or  assignment  to 
his  wife,  of  all  his  interest  in  the  certificate  of  insurance.'^ 

Mulkey,  J.,  dissented  from  the  reasoning  and  conclusion  of 
the  opinion.  His  dissenting  opinion  is  sustained  by  the 
decided  weight  of  authority. 

The  fund  did  not  belong  to  the  member.  He  could  control 
its  direction  in  the  method,  and  to  the  extent  provided  in  the 
by-law.  He  had  designated  his  children  as  his  beneficiaries, 
and  they  had  a  right  to  the  fund  at  his  death,  unless  he  had 
made  a  change  of  beneficiaries  in  accordance  with  the  contract 
of  insurance.  He  could  have  made  his  wife  his  beneficiary  by 
a  later  testamentary  appointment,  or  by  merely  revoking  his 
will  and  leaving  the  beneficiary  to  be  designated  by  the  by-law 
above  referred  to,  but  under  the  contract  he  had  no  ])ower  to 
assign  the  certificate." 

An  unmarried  man  took  out  a  policy  of  insurance  on  his 

'  Swift  V.   Benefit  AsstKuation,  96  ments  under  the  circumstances  gave 

111.  809;  See  also  Brown  V.  Mansus,  to  the  wife  an   equitable   lien    upon 

N.  H.  5  Atl.  Rej).  7(58.  the  fund  for  the  amount  paid  by  her, 

-  See  Designation  of   Beneficiary,  but    she    was    entitled   to    nothing 

Chapter  XII.    The  payment  by  her,  more;  Dutton  v.  Willner,  52   N.    Y. 

as    assignee,   of    assessments,    even  312;  National  Mutual  Aid   Society 

though  made  in  good  faith,  gave  her  v.  Lupoid,  101  Pa.  St    111 ;  Meier  v. 

no  title  to  the  contract  of  insurance;  Meier,  Ifi  Mo.  Aiiji.  68.    "VVeisert  v. 

De  Jonge  v.   Goldsmith.   86   N.   Y.  'Muehl.  81  Ky.  336. 
614;    The   advancement    of  assess- 


228  BENEFICIARY.  [ChAI'.   11,  p93, 

life,  one  of  the  conditions  of  which  was:  "This  policy  is 
issued  and  accepted,  upon  the  express  condition  that  the  assured 
may,  with  the  consent  of  the  company,  at  any  time,  assign  it, 
or  before  assignment,  change  th^.  beneficiaries  therein,  or  make- 
any  other  change." 

He  named  his  sister  as  his  beneficiary,  and  delivered  the- 
policy  to  her.  Subsequently  he  married,  and,  as  an  induce- 
ment thereto,  he  agreed  that  if  the  woman  would  marry  hini^ 
she  should  be  made  the  beneficiary  of  the  policy.  After  the 
marriage,  and  when  the  next  semi-annual  premium  fell  due,, 
the  assured  paid  it,  on  condition  that  the  beneficiary  should  be 
changed  from  his  sister  to  his  wife.  The  sister  had  the  policy,, 
and  would  not  give  it  up.  The  agent  was  uncertain  whether 
the  change  conld  be  made  without  the  policy,  but  promised  to 
notifiy  the  company  and  have  the  change  made  if  possible. 
The  ofiicers  agreed  to  attend  to  the  matter,  but  overlooked  it . 
After  the  death  of  the  assured,  the  company  filed  a  bill  to- 
require  the  wife  and  sister  to  interplead,  and  have  the  question 
determined,  as  to  who  was  entitled  to  the  money.  It  was 
decided,  upon  these  facts,  that  whether  such  change  was  to  be 
effected  by  parol  or  in  writing,  was  a  matter  entirely  between, 
the  assured  and  the  company;  and  if  the  latter  chose  to  dis- 
pense with  any  of  the  modes  of  effecting  this  purpose,  this 
concerned  no  third  party,  nor  could  the  company  capriciously 
refuse  the  change.  The  marriage  having  been  consummated  on 
the  inducement  of  the  promised  change  of  the  beneficiary 
under  the  policy,  equity  considers  that  done  which  ought  to- 
be  done,  and  will  give  relief  accordingly.^ 

A  member  procured  a  certificate  of  insurance,  making  his 
betrothed  his  beneficiary.  He  retained  the  certificate  in  his 
possession,  but  afterward  lost  it.  She  married  another  man^ 
and,  within  two  years  thereafter,  he  made  a  statement  of  the 
loss,  and  applied  to  the  society  for  a  reissue  of  the  certificate, 
making  his  son  the  beneficiary.  The  society  denied  the  appli- 
cation, on  the  ground  that  the  certificate  w^as  not  surrendered,, 
although  lost,  and  that  the  rules  of  the  society  required  the 
change  to  be  indorsed  on  the  original  certificate.  By  the 
advice  of  the  ofiicers  of  the  society,  he  attempted  to  make  the 
change  of  beneficiary  by  giving  a  power  of  attorney  to  another 
to  collect  the  amount  which  should  accrue  under  the  certifi- 
cate. After  his  death,  the  society  conceded  its  liability  upon 
the  certificate,  and  the  court  was  asked,  in  equity  and  good 

*  Nally  V.  Nally,  74  Ga.  669. 


Chap.  11,  §195.]  beneficiary.  229 

•conscience,  to  determine  whether  the  original  beneficiary  or  the 
son  of  the  deceased  was  entitled  to  the  fund.  It  was  held 
that  such  acts  upon  the  part  of  the  member  constituted  an 
equitable  assignment  of  the  certificate.' 

§  194.     Ijimitation    upon  the  right    to    assign. 

Where,  by  the  charter  of  a  society,  the  benefit  fund  is  payable 
to  the  assigns  of  the  member,  no  limitation  or  condition  may 
be  placed  upon  the  right  of  the  member  to  assign  his 
certiticate.'' 

But  a  by-law  of  such  a  society  is  not  inconsistent  with  the 
charter,  which  provides  that  such  an  assignment,  in  order  to  be 
valid,  shall  be  recorded  in  the  books  of  the  society.  This  is 
not  a  limitation  upon  the  right  to  assign ;  it  is  a  reasonable 
provision  for  the  protection  of  the  society,  and  relates  merely 
to  the  manner  of  the  assignment.' 

Where  the  charter  is  silent  as  to  the  assignment  of  a  certifi- 
cate, the  society  may  provide,  in  its  by-laws  or  certificate,  for 
its  assignment  to  proper  beneficiaries,  and  may  place  upon  its 
assignment  such  limitations  and  conditions  as  it  may  deem 
proper. 

§  195.  The  by-laws  and  certificate  may  not 
provide  for  an  assignment  of  the  certificate 
wliicli  is  contrary  to  tlie  law  of  the  state.  In  com- 
menting upon  an  assignment  of  a  certificate,  the  Supreme  Court 
of  Texas  says:  "  It  is  of  no  importance  that  the  rules  of  the 
Knights  of  Honor  permitted  benefit  certificates  to  be  trans- 
ferred to  persons  having  no  insurable  interest  in  the  life  of  the 
meniber,  and  that  it  consented  to  the  assignment  made  in  this 
case.  No  action  of  the  lodge  could  change  public  policy,  or 
make  a  contract  valid  wliicli  the  interests  of  society  demanded 
should  not  be  enforced."  ■* 

In  this  case,  the  court  held  that  the  assignment  of  a  contract 
of  insurance  upon  the  life  of  a  member  to  his  cousin,  who 
lived  with  him  as  an  adult  male  member  of  his  family,  and  as 
a  dependent  upon  the  member  for  employment  and  support, 
upon  an  agreement  by  the  assignee  to  pay  the  assessments 
necessary  to  keep  the  policy  in  force,  is  void  as  being  to  one 

'  Grand  Lodge  V.  Child  Mich.  38  ^  Coleman  v.  Knisrhts  of    Honor. 

N.  W.  Rep.  1.  18  Mo.  App.189. 

'^  Kaub  V.  Masonic  Mutual   Relief  *  Price    v.   Supreme    Lodge  etc. 

Association,  3  Mackey,  D.C  68.  Te.vas;   4  S.  W.  Kep,  635. 


230  BENEFICIARY.  [ChAP.  11,  §197. 

who  has  no  insurable  interest  in  the  life  of  the  assured,  and  a& 
being  against  public  policy;  and  the  court  gave  the  fund  to- 
the  original  beneficiary  named  in  the  contract. 

It  is  well  settled  in  the  federal  courts  that  a  ])arty  cannot 
take  out  an  insurance  upon  his  own  life,  and  assign  the  policy, 
either  contemporaneously  with  its  execution  or  subsequently,. 
to  a  person  having  no  legal  interest  in  his  life,  but  the  decisions 
of  the  state  courts  upon  this  point  are  conflicting.' 

In  New  York  it  is  held  that  a  valid  contract  of  insurance 
may  be  assigned  to  a  person  who  has  no  insurable  interest  in 
the  life  of  the  insured — that  the  contract,  being  valid  in  its 
inception  between  the  parties,  is  valid  in  the  hands  of  the 
assignee.'' 

§  196.  Where  certificate  provides  that  it  may 
be  assig^necl.  In  Jackson  et  al.  v.  Anderson  et  al  ,  Ky. ;  3 
S.  W.  Rep.  326,  it  was  held  that  although  ordinary  life  insur- 
ance policies  are  not  assignable,  and  cannot  be  placed  upon  the 
market  as  a  promissory  note  or  bank  paper,  where  a  certificate 
of  membership  in  a  mutual  benefit  society,  in  terms,  confers  on 
the  member  a  right  to  assign  the  benefit,  and  the  member 
assigns  it  in  exchange  for  a  tract  of  land,  the  assignee,  after 
retaining  it  for  ten  years,  cannot  sue  to  set  aside  the  contract 
on  the  "ground  that,  in  the  particular  instance,  there  was  no 
right  to  assign,  and  recover  back  the  land,  especially  where  it 
appears  that  he  has  not  tendered  the  certificate  back  to  the 
member,  but  has  permitted  it  to  lapse  by  failing  to  pay  the 
premiums. 

In  discussing  the  questions  involved  in  the  case  the  court 
says:  "All  the  certificates  issued  by  the  Kentucky  Grangers' 
Mutual  Benevolent  Society  purport  to  confer  on  the  insured 
the  right  to  assign,  and  it  may  well  be  doubted  whether  the 
corporation  can  make  any  defense  to  a  bona  fide  holder  who 
has  been  induced  to  purchase,  not  by  the  representations  of 
the  agents  that  they  were  assignable,  but  by  express  terms  of 
the  policy  transferred." 

§  197.  Consent  and  approval  of  society  may  be 
required.  A  society  issued  a  benefit  certificate  whereby  a 
member's  life  was  insured  in  a  certain  sum,  and  the  certificate 

1  Waruock  v.  Davis.  104  U.S.  775 ;        '^  Olmsted  v.  Keys,  85  N.  Y.  593. 
Cammack  v.  Lewis,  15  Wall,  643. 


Chap.  11,  §198.]  beneficiary.  231 

provided  that  no  assignment  thereof  should  be  valid  unless 
approved  by  the  secretary  of  the  society.  The  member 
assigned  it  without  such  approval,  and  the  court  held  such 
assignment  invalid.' 

A  society  may  ]>rovide  that  certificates  of  membership, 
wherein  the  lives  of  members  are  assured  for  the  benefit  of 
such  persons  as  shall  be  designated  by  the  member  receiving 
the  certificate,  shall  be  assigned  and  transferred  only  with  the 
consent  of  the  society  endorsed  thereon;  and  one  to  whom 
such  a  certificate  has  been  assigned  without  such  endorsement 
cannot  mantain  an  action  against  the  society  after  the  death  of 
the  assignor.^ 

§  198.  Rig-lits  of  assig-iied.  A  person  accepting,  by 
assignment  from  a  member,  a  certificate  of  membership  in  a 
mutual  benefit  society,  is  bound  by  the  provisions  and  condi- 
tions of  the  constitution  and  by-laws  of  the  society  relating  to 
the  contract  of  insurance;  and  this  is  especially  true  when  the 
constitution  and  by-laws  are  made  a  part  of  the  certificate  by 
its  express  terms.^ 

'  Harman  v.  Lewis  et  al,  24  Fed.    101  Pa.  St.,  111. 
Rep.,  97-530.  ^  Miller  v.  Assurance  Association, 

2  National  Mutual,  etc.,  v.  Lupoid,    42  N.  J.  Eq.  459 ;  7  Atl.  Rep.  895. 


232  BENEFICIARY.  [ChAP.  11,  §199 


Who  May  be  Beneficiary.    Part  III. 


Attachment,  Garnishment,  etc. 


Sec.  199.     Generally. 
;    Sec  200.     When  benefit  fund  of  society  may,  or  may  not,  be  attached. 

§  199.  Attacliiiient,  g-arnishnient,  etc. — Gen- 
erally. In  treating  of  the  question  as  to  who  may,  by  con- 
tract, legally  acquire  the  benefits  of  certificates  of  insurance  in 
mutual  assessment  societies,  it  is  proper  also  to  inquire  whether 
those  benefits  may  be  reached  by 'third  parties,  by  process  of 
law. 

As  a  general  rule,  when  the  preliminary  proofs — the  making 
of  which  is  a  condition  precedent  to  a  recovery  upon  a  life 
insurance  policy — have  been  made,  the  amount  due  and  owing 
to  the  beneficiary  may  be  reached  by  attachment  and  garnish- 
ment in  the  same  manner,  and  to  the  same  extent,  as  other 
choses  in  action. 

In  Girard  F.  &  M.  Ins.  Co.  v.  Field,  45  Pa.  St.,  129,  it  was 
held  that  where  a  loss  had  occurred  under  the  policy  of  insur- 
ance, a  garnishment  would  lie  against  the  fund,  whether  proofs 
of  loss  had  been  made,  or  not,  at  the  time  garnishee  process 
was  served,  and  that  the  simple  operation  of  the  garnishee 
process  was  to  place  the  plaintiff  in  the  garnishee  proceedings 
into  the  same  relation  with  the  company  that  the  defendant 
would  have  held,  but  for  the  proceedings  in  garnishment.' 

Several  cases,  however,  hold  that  the  proceeds  of  a  policy  of 
insurance  cannot  be  made  the  subject  of  attachment  or  garn- 
ishment proceedings  until  such  preliminary  proofs  have  been 
made.  They  base  their  view  upon  the  theory  that,  as  the  liability 
of  the  company  does  not  ripen  into  an  indebtedness  by  the  mere 
lapse  of  time,  but  upon  the  performance  of  some  act  by  the 
other  party  to  the  contract,  the  company  may,  until  such  act 

1  See  Ins.  Co.   v.    Connor,  20  111. 
App.,  297. 


C!hAP.   11,  §200.]  BENEFICIARY.  233 

has  been  performed,  properly  say  that  there   is  nothing  due 
the  beneliciary  iijDon  tlie  policy.'" 

§  200.  When  benefit  fund  may  or  may  not  be 
attached,  etc.  While,  with  regard  to  ordinary  life  insur- 
ance contracts,  the  rule  is  undoubtedly  as  above  stated,  it  has, 
nevertheless,  been  held  that  contracts  of  insurance  in  mutual 
beneiit  societies  cannot  be  made  the  subject  of  attachment  or 
garnishment  proceedings. 

This  immunity  of  the  fund  from  such  proceedings  arises,  if 
at  all,  from  the  provisions  of  the  law  providing  for  the  organ- 
ization of  such  societies. 

Public  statutes  of  Mass.,  chap.  115,  sec.  8,  enacts  that  a  cor- 
poration organized  under  that  chapter  may  "  provide  in  its  by- 
laws for  the  payment  by  each  member  of  a  fixed  sum,  to  be 
held  by  such  association  until  the  death  of  a  meml)er  occurs, 
and  then  to  be  forthwith  paid  to  the  person  or  persons  entitled 
thereto,  and  such  fund  so  held  shall  not  be  liable  to  attachment 
by  trustee  or  other  process.-'  In  construing  this  provision  of 
the  law,  the  court  says:  "In  view  of  the  object  of  these  benefi- 
■ciary  corporations,  of  the  limited  number  of  persons  for  whose 
benefit  they  are  intended,  of  the  fact  that  the  member  of  the 
corporation  could  not  provide  for  his  creditors  by  a  benefit 
certificate,  or  dispose  of  the  fund  by  testamentary  bequest,  we 
cannot  doubt  that  the  fund  due  on  the  certificate  is  not  subject 
to  the  attachment  while  it  remains  in  the  hands  of  the  corpora- 
tion. If  it  were,  it  would  be  impossible  for  the  member,  in 
many  instances,  to  provide  for  those  for  whom  it  was  con- 
templated that  he  should,  by  this  method,  be  able  to  make 
provisions." 

The  court  held  that,  upon  the  death  of  the  husband,  the 
wife's  interest  in  the  benefit  fund  could  not  be  attached,  in  the 
hands  of  the  society,  for  her  debt.^ 

In  Schillinger  v.  Boes,  etc.,  Ky. ;  3  S.  W".  Rep.,  427,  it  was 
held  that  a  certificate  of  membership  in  a  mutual  benefit 
society,  payable  to  the  widow  of  a  member,  is  for  the  benefit 
of  the  member's  family,  and  cannot  be  seized,  upon  the  death 
of  a  member,  by  the  widow's  creditors,  where  the  charter  of 
the  association  provides  that  the  funds  shall  be  for  the  relief  of 
the  member's  family,  and  shall  be  exempt  from  seizure  under 

'^  Love  joy  et  al.  v.  Hartford  Ins.  IMich ,  201;  Bishop  v.  Young,  17 
Co.  et  nl..  11  Fed.  Rep.,  G:^;  Martz  v.     Wis.,  4G. 

Detroit  Fire  &  Marine   Ins.  Co.,  28        ^  Saunders    v.    Robinson    et    al, 

Mass.;  10  N.  E.  Rep..  815. 


234  BENEFICIARY.  [ClIAl'.  11.  §200a. 

execution    or   other  legal  process,    to   paj   any   debt   of   the 
deceased  member. 

This  construction  was  given  to  this  provision  of  the  charter, 
on  the  ground  that  it  harmonized  with  the  legislative  action 
upon  the  subject,  as  well  as  with  the  rule  which,  when  applied 
to  such  organizations,  I'equires  a  liberal  construction  of  their 
charters  in  favor  of  the  objects  of  their  bounty,  and  to  prevent 
the  application  of  their  funds  to  the  benefit  of  those  who  are 
strangers  to  the  organization. 

§  300a.  The  charter  of  a  society  provided:  "No  part  of 
the  stock  or  interest,  which  any  member,  or  his  widow,  or 
children  may  have  in  said  institution,  shall  be  subject  to  any 
debt,  liability,  or  legal  or  equitable  process  against  him,  or 
any  of  them." 

A  member  died,  and  his  son  became  entitled  to  $100.00  as  a 
benehciary  of  his  certiiicate.  The  creditor  of  the  son  levied 
upon  that  sum  in  the  hands  of  the  society  by  attachment,  and 
it  was  held  that  the  money  was  subject  to  such  attachment. 
The  court  says: 

"The  money  due  to  the  representatives  of  a  deceased  mem- 
ber, is  in  no  sense  an  interest  'in  said  institution.'  It  is  a 
debt  due  from  it  to  them,  not  as  shareholders,  but  as  credit- 
ors." ' 

In  Hankinson  v.  Page,  31  Fed.  Rep.  184,  it  was  held  that 
the  interest  of  an  heir  at  law  of  a  deceased  member  of  a  mut- 
ual benefit  society,  in  a  sum  to  be  raised  and  paid  by  the 
society  on  the  death  of  a  member,  was  attachable  in  New 
York.  In  this  case,  it  was  insisted  that  the  demand  against 
the  society  was  in  the  nature  of  equitable  assets,  and,  therefore, 
could  not  be  attached,  but,  npon  this  point,  the  court  says: 

"Although  an  attachment  is  a  special  remedy  at  law,  and, 
in  the  absence  of  statutory  authority,  does  not  reach  property 
or  interests  which  can  only  be  realized  by  the  assistance  of  a 
court  of  equity,  the  tendency  of  legislation  in  this  country  has 
been  to  enlarge  the  operation  of  the  writ,  and  subject  interests 
and  kinds  of  property  to  seizure  under  an  attachment,  which 
are  not  subject  to  execution  at  law."' 

The  court  held  that,  as  the  beneficiary  could  maintain  a  suit 
at  law  to  enforce  the  contract  against  the  association,  and  was 

'  Geiger    and  Board,   etc.,  v.  Mc        '  Drake  on  Attachment  at  sec.  7. 
Lin,  78  Ky.  232. 


Chap.  11,  §200a.]  beneficiaky.  235 

not   compelled   to  resort  to  equity,  the  point  was   not   well 
taken. 

Where  the  law,  under  which  a  mutual  benefit  society  is 
organized,  provides  that  the  benefit  fund  shall  be  exempt 
"  from  execution,  and  shall  not  be  liable  to  be  seized,  taken  or 
appropriated  by  any  legal  or  equitable  process  to  pay  any  debt 
or  liability  of  such  deceased  member,"  the  fund,  after  it  has 
been  received  by  the  beneficiary,  is  not  exempt  from  the 
claims  of  the  creditors  of  such  beneficiary.'' 

» Bolt  V.  Keyhoe,  30  Hun  619. 


CHAPTER  XII. 


Designation  of  Beneficiary.— Part  I. 


Designation  and  Change  of  Beneficiary. 

Sec   202  ("  ^^  mutual  benefit  society,  beneficiary  has  no  vested  rights. 

Sec.  203.  Right  of  members  to  change  beneficiary  when  certificate  is 
payable  to  his  legal  representatires. 

Sec.  204.  Effect,  on  right  to  change,  of  delivery  of  certificate  to  bene- 
ficiary named  therein. 

Sec.  205.  Effect  of  agreement  between  two  members,  that  each  shall 
procure  certificate  for  benefit  of  survivor. 

Sec  206.     How  change  of  beneficiary  is  to  be  made. 

Sec.  207.    Fund  payable  "  as  member  may  direct." 

Sec  208.     Designation  by  will. 

Sec.  209.    Where  the  right  to  devise  the  fund  is  conferred  by  charter. 

Sec.  210.     When  designation  by  will  is  invalid. 

Sfc   215  s  Power  of  appointment  reserved  to  the  member. 

Sec.  216.  When  power  to  designate  or  change  beneficiary  is  exhausted. 

Sec  217.  Time  within  which  power  of  appointment  must  be  exercised. 

Sec  218.  Designation  by  special  direction. 

Sec  219.  Delivery  of  certificate  to  beneficiary  not  necessary. 

Sec.  201.  In  mutual  benefit  society,  beneficiary 
lias  no  vested  rig:hts.  A  policy  of  insurance  in  an  ordi- 
nary life  insurance  company  is  not  the  property  of  the  assured 
in  any  sense,  but  it  is  the  property  of  the  beneficiary  fj-om  the 
day  of  its  issue,  for,  from  that  time,  he  has  the  whole  bene- 
Hcial  interest.' 

The  benehciary  alone  has  the  right  to  assign  or  surrender  it. 
The  contract  of  insurance  is  between  the  company,  on  the  one 
part,  and  the  beneficiary,  on  the  other,  and  from  the  day  of  its 

'  2  Phillips  Ins.  p.  626 — sections  ington  Life,  ect.,  v.  Haney,  10  Kan. 
2058,  2059,  2060 ;  Bliss  on  Life  Insur-  525 ;  Pence  v.  Makepeace,  65  Ind.  345 ; 
ance.  Section  318;  Chapin  v.  Fel-  Wilburn  v.  Wilburn,  83  Ind.  55. 
lowes,  36  Conn.  132;  Rawls  v.  Am.  Ricker  v.  Charter,  O.  L.  I.  Co.,  27 
Mut.  Life,  etc.,  27  N.Y.  282;  Wash-     Minn.  195. 

(236) 


Chap.  12,  §201.]  beneficiary.  23T 

issue,  the  assured  loses  control  over  it,  and  is,  in  some  respect,, 
a  stranger  to  it.' 

A  power  of  disposition,  or  of  appointment  of  a  new  bene- 
ficiary, may  be  reserved  by  tlie  assured  in  the  contract.^ 

But  the  decided  weight  of  authority  is  to  the  effect  that,  in 
mutual  benefit  societies,  the  beneficiary  acquires  no  vested 
right  in  the  benefit  which  is  to  accrue  upon  the  death  of  a 
member,  until  tlie  death  of  a  member  occurs.  During  his 
lifetime  the  member  may,  therefore,  exercise  the  power  of 
appointment,  without  other  limits  or  restrictions  than  such  as 
are  imposed  by  the  organic  law,  or  by  the  rules  and  regula- 
tions of  the  society,  adopted  in  compliance  therewith. ' 

Although  this  is  the  general  rule,  still  it  cannot  prevail  if 
the  charter  of  the  society  prohibits  a  change  in  the  beneficiary 
first  agreed  upon  and  designated/ 

The  essential  difference  between  a  certificate  of  membership 
in  a  mutual  l)enetit  society,  and  an  ordinary  life  policy,  is 
that,  in  the  latter,  the  rights  of  the  beneficiary  are  fixed  by  the 
terms  of  the  polic}',  while  in  the  former  they  depend  upon  the 
certificate  and  the  rights  of  the  member  under  the  constitution 
and  by-laws  of  the  society.  In  the  one  case, the  rights  of  the- 
beneficiary  are  fixed  and  vested  from  the  moment  tli'e  policy 
takes  effect;  in  the  other,  they  are  subject  to  such  changes  as 
the  law  of  the  society  authorizes  its  members  to  make. 

All  that  a  beneficiary  has  during  the  lifetime  of  the  mem- 
ber, owing  to  his  right  of  revocation,  is  a  mere  expectancy,, 
dependent  upon  the  will  and  act  of  the  holder  of  the  certificate. 
This  expectancy  is  not  property." 

'  The  contrary  doctrine,  however,  Lodge,  20  Cent.  Law  J.  398 ;  23  Fed. 

has    been    held  in  Wisconsin   and  Rep.  718;  Presbyterian  etc.  Fund  v. 

Missouri;  Foster  v.   Gile,   50   Wis.  Allen,    106   Ind.  593;  7  N.  E.   Rep 

()03;  Kernan    v.    Howard,  23   Wis.  317;    Hellenberg     v.     Independent 

108;    Gambs  v.   Covenant  Mut.   L.  Order,  etc.  94  N.  Y.  580;   Duvall  v. 

Ins.  Co.  50  Mo.  44;  See  also  Garner  Goodson,  79  Ky.  224 ;  Johnson  v.  Van 

v.  Ins.  Co.  32  Alb.  L.  J.  91;  Ins.  Co.  Epps,  110  111.   551-558;    Lamont    v. 

V.  Stevens,  19  Fed.  Rep.  671.  Grand  Lodge,  etc.,  31  Fed.  Rep.  177; 

^Greenov.   Greeno,  23   Hun  482;  Union  Mutual  v.  Montgomery,  Mich. 

Hutchings  v.  Miner,  46  N.  Y.  456.  38  N.  W.  Rep.  588 

^  Masonic  Mutual    etc.   v,    Burk-  ''  Presbyterian  etc.  Fund  v.  Allen, 

hart,  110  Ind.  189;  10  N.  E.  Rep.  79;  106  Ind  595;  7  N.E.  R.  3 17;  Kentucky 

Splawn  V.  Chew,  60  Texas  532 ;   Aid  etc.  Ins.  Co.  v.  Miller,  13   Bush,  489; 

Society  v.  Lewis,  9  Mo.  App.  412;  Van  Bibber  v.  Van  Bibber,  82   Ky. 

Ballon  V.  Gile,  50  Wis.  614 ;  7  N.  W.  347. 

Rep.  561;  Dietrich  v.  Madison  Re-  ^Masonic  ]\Iutual  etc.  v.  Burkhart 
lief,  etc,  45  Wis.  84;  Richmond  v.  110  Ind.  189;  10  N.  E.  R  79;  Durian 
Johnson,  28  Minn.  447;  10  N.  W.  v.  Central  Verein,  7  Daly  168;  Ten- 
Rep.  596 ;  Eastman  v.  Provident  etc.  nessee  Lodge  v.  Ladd,  5  Lea  716  ^ 
20  Cent.  Law  J.  266;  Gentry  V.   Sup.  Swift  v.  Benefit  Ass'n.  96  111.  309 


238  BENEFICIAKY.  [ChAP.  12,  §202. 

§  303.  Same  subject  contiiiuecl.  The  true  principle 
underlying  these  decisions  is  that,  whereas  policies  of  life 
insurance  in  ordinary  companies  are  construed  to  be  contracts 
between  the  company  and  the  beneficiary,  in  mutual  beneiit 
societies  certificates  of  membership,  and  policies  of  insurance 
are  held  to  be  contracts  between  the  society  and  the  member 
whose  life  is  insured. 

In  Masonic  Mutual  etc.  V.  Burkhart,  110  Ind.  189;  11  N. 
E.  Rep.  449,  where  the  decision  in  Masonic  etc.  v.  Burkhart, 
10  N.  E.  Rep.  79,  came  before  the  court  again,  on  petition  for 
rehearing,  the  court  says: 

"  The  right  to  change  the  contract  by  mutual  agreement  of 
the  parties  is  not  derived  from  the  charter  and  by-laws,  but 
may  be  either  directly  or  impliedly  limited  thereby.  Unless  the 
power  to  change  is  thus  limited,  the  beneficiary  named  in  a 
certificate  of  membership  has  no  vested  interest  in  the  fund 
prior  to  the  death  of  the  member." 

Referring  to  the  act  of  March  2,  1877,  Rev.  St.  Ind.  1881 
sec.  3820,  the  court,  in  this  case,  says: 

"That  act  declares  that  certificates  of  membership  in  charit- 
able associations  ^hall  be  regarded  as  contracts  between  the 
members  and  the  association.  Such  certificates  were  contracts 
between  the  members  and  the  society  before,  precisely  as  they 
were  after,  the  act.  The  statute  was  merely  declaratory  of 
what  the  law  was  in  that  respect  from  the  beginning.  Prior 
to  the  statute  it  was  competent,  however,  for  a  charitable  asso- 
ciation, in  its  constitution  and  by-laws,  to  limit  or  prohibit 
the  right  to  make  changes  in  the  names  of  beneficiaries  after 
they  had  once  been  designated  us  such.  Since  the  statute 
went  into  effect  and  became  incorporated  into  the  constitutions 
of  such  societies,  no  limitation  or  restriction,  repugnant  to  its 
terms,  can  be  imposed  upon  the  societ}'  and  its  members  by 
any  regulation  of  the  association." 

And  it  was  held  in  Deady  v.  Bank  Clerk's  etc.  Ass'n.  49  N. 
Y.  Super.  Ct.  246,  that  a  member  of  a  mutual  benefit  society, 
who  has  designated  a  person  to  receive  the  benefit  to  accrue 
upon  his  decease,  may  afterward  designate  another  person. 
The  one  first  designated  cannot  claim  as  under  a  con- 
tract. 

In  societies  where  the  certificates  are  not  contracts  with  the 
beneficiaries,  the  laws,  rules  and  regulations  in  regard  to  bene- 
ficiaries may  be  changed  during  the  continuance  of  the  certifi- 
cates, so  as  to  limit  and  abridge  their  interests;  and  such  limi- 


Chap.  12,  §204.]  beneficiary.  239 

tations  are  not  subject  to  objection  as  iinpairing  vested  rights, 
or  the  obligation  of  contracts.' 

Where  the  constitution  of  a  mutual  benefit  society  provides 
that  its  by-laws  may  be  amended  at  any  time,  a  benehciary  in 
a  certilicate  of  membership,  having  no  vested  rights  in  such 
certihcate,  and  not  being  a  party  to  the  contract,  cannot  com- 
plain that  a  by-law  in  existence  at  the  time  the  certilicate  was 
issued,  providing  that  the  member  may  surrender  the  certifi- 
cate and  receive  a  new  one,  with  the  consent  of  the  beneficiary, 
was  amended,  so  as  to  omit  the  consent  of  the  beneficiary;  nor 
can  he  recover  on  the  original  certificate,  after  it  has  been 
surrendered,  and  a  new  one  issued.* 

But  where  a  provision  of  the  charter,  or  a  by-law  of  the 
society,  constitutes  part  of  the  contract  of  insurance,  its  alter- 
ation, without  the  consent  of  the  member,  cannot  affect  the 
contract.^ 

§  203.  Right  of  member  to  change  beneficiary 
when  certificate  is  payable  to  liis  "  legal  repre- 
sentatives," etc.  AVhere  a  certificate  of  membership  is 
made  payable  to  the  "  legal  representatives"  of  the  member,  or 
to  his  "executors  and  administrators,"  as  may  be  done  under 
the  charters  of  some  societies,  he  may,  with  the  consent  of 
the  society,  surrender  the  same  and  take  out  a  new  certificate 
payable  to  a  third  person." 

§.204.  Effect  of  delivery  of  certificate  to  ben- 
eficiary named.  The  delivery  of  the  certificate  to  the 
beneficiary  named  therein  has  no  effect  whatever  upon  the 
right  of  the  member  to  change  the  designation,  as  provided  in 
the  contract  of  insurance." 

The  benefit  certificate  issued  by  a  society,  to  Mrs.  II.  It.  F., 
was  made  payable,  in  the  event  of  her  death,  to  her  husband, 
subject  to  change  at  her  pleasure,  on  presentation  of  the  cer- 
tificate together  with  new  application,  to  the  supreme  secretary. 
Notwithstanding  the  fact  that  the  certificate  was  delivered  to 
the  husband,  and  the  assessments  thereon  were  paid   bv  iiim, 

'  Durian  v.  Central  Verein,  7  Daly  ••  Johnson  et  al.  v.  Van  Epns,  110 

1G8.  111.  551. 

''  Byrne  v.  Casey,  Texas ;  8  S.  W.  "  See  Nally  v.  Nally,  74  Ga.  669 ;  See 

Rep.  38.  also    "Equitable  Assiirnment"   etc. 

^Morrison  v.  Wisconsin  Odd  Fel-  Sec.  198;   Sabin   v.  Grand  Lodffe,  6 

lows  etc.,  59  Wis.  102;    Gundlach  v.  N.  Y.  St.  Repfr.  151. 
Gormania,  etc.  Ass'n.,  49   IIow.  Pr. 
190. 


240  BENEFICIARY.  [Chap.  12,  §206. 

his  wife  had  the  rio^ht,  on  presenting  it  to  the  supreme  secre- 
tary, to  apply  for,  and  effect  a  change  in  the  designation  of  the 
beneficiary  named  therein.  When  the  husband  accepted  the 
certificate,  and  paid  the  assessments  thereon,  he  knew,  or 
ought  to  have  known,  that  he  field  it  subject  to  the  right  of 
his  wife  to  change  the  designation  of  those  to  wliom  the  insur- 
ance money  should  be  paid  upon  her  death.' 

§  305.  Effect  of  ag^reemeiit  between  two 
iiieinbers  that  each  shall  procure  certificate 
for  benefit  of  surv^ivor.  When  the  contract  of  insur- 
ance provides  that  a  member  may,  at  any  time,  change  the 
designation  of  his  beneficiary,  and  make  a  new  direction  for  the 
pa3'ment  of  the  benefit  fund,  a  mutual  agreement  between  two 
members  that  each  shall  procure  a  benefit  certificate  for  the 
benefit  of  the  survivor,  in  case  of  death,  does  not  take  away 
from  either  member  the  power  of  appointment  of  a  new  bene- 
ficiary. 

Where  a  husband  and  wife  become  members  of  a  society 
and  agree  that  their  respective  certificates  shall  be  continued 
operative  for  the  benefit  of  the  survivor,  and  the  by-laws  of 
the  society  provide  that  any  member  holding  a  beneficiary 
certificate,  desiring  at  any  time  to  make  a  new  direction  as  to 
its  payment,  may  do  so  in  a  certain  manner,  the  power  of 
appointment  of  a  new  beneficiary  still  resides  in  each  meml)er, 
by  virtue  of  the  contract  with  the  society.  While  the  exercise 
of  this  power  by  the  husband,  for  instance,  is  in  violation  of 
his  agreement  with  his  wife,  it  is  one  of  the  elements  of  the 
agreement  under  which  the  certificate  was  issued.  The  con- 
tract of  insurance  is  executory  on  the  part  of  the  society  dur- 
ing the  life  of  the  member,  and  its  liability  to  pay  the  fund 
after  his  death  is  upon  the  last  direction  as  to  its  payment, 
made  in  conformity  with  the  terms  of  the  contract.^ 

§  306.    How  change  of  beneficiary  is  to  be  made. 

We  have  seen  in  a  preceding  chapter  that  no  designation  of 
a  beneficiary  may  be  made  contrary  to  the  general  laws  of  the 
state,  the  organic  laws  of  the  society,  and  the  rules  and  regu- 
lations made  in  conformity  therewith. 

We  shall  now  inquire  into  the  proper  mode  and  manner  of 
making  and  changing  such  designation. 

'  Fisk  V.  Equitable  Aid  Union,  Weekly  Dig.  309;  6  N.  Y.  St.  Rept'r 
Pa.  11  Atl.Rep.  84.  151. 

2  Sabin  v.  Grand  Lodge,  26  N.  Y. 


Chap.  12,  208.]  beneficiary.  241 

The  charter,  rules  and  regulations,  or  the  certificates  of  mem- 
bership, usually  provide  in  a  definite  manner  how  the  changes 
in  the  designation  of  beneficiaries  shall  be  made. 

It  may  be  here  remarked,  that  when  a  right  to  make  such  a 
change  in  the  beneficiary,  as  has  been  made,  is  shown  to  exist, 
in  the  absence  of  evidence  to  the  contrary,  it  will  be  presumed 
that  the  change  was  made  in  the  manner  provided  in  the  laws, 
rules  and  regulations  upon  that  subject.' 

A  provision  of  the  constitution  of  a  society,  requiring  a 
member  to  designate  the  beneficiary  whom  he  designs  to  have 
share  in  the  benefit  fund  at  his  death,  is  sufficiently  complied 
with  by  any  form  of  words  that  is  sufficient  to  clearly  make 
known  his  intentions,  but  the  designation  must  be  made  in 
the  mode  prescribed  by  the  society. 

§307.  Fund  payable  "as  the  member  may 
direct."  A  by-law  of  an  incorporated  society,  prescribing 
how  the  members  shall  direct  the  payment  of  the  benefit  fund, 
is  not  inconsistent  with  a  provision  of  the  charter  that  such 
fund  shall  be  paid  "  as  the  member  may  direct,"  provided  the 
rule  prescribed  by  the  society  is  reasonable  for  that  purpose." 

§  308.  Designation  by  will.  The  mode  of  designat- 
ing or  changing  the  beneficiary  by  last  will  and  testament 
has  given  rise  to  much  controversy. 

Where  the  benefit  fund  is  payable,  at  the  death  of  the  mem- 
ber, to  his  estate,  and  where  there  is  nothing  in  the  act  under 
which,  a  corporation  is  organized,  or  in  the  charter,  consti- 
tution, by-laws,  or  certificate  of  membership,  which  takes 
away  from  member  the  right  and  power  of  disposing  of 
the  benefit  fund  by  last  will  and  testament  in  the  ordinary 
manner,  such  right  certainly  exists. 

We  have  seen  in  the  preceding  chapter,  that  in  very  few 
societies  is  the  estate  of  the  member  a  proper  beneficiary,  and 
that  in  most  cases  the  member  has  no  property  in  the  benefit 
fund.  When  he  has,  however,  an  interest  in  the  fund,  which 
ma}^,  at  his  death,  become  assests  of  his  estate,  he  may  dispose 
of  such  fund  by  will,  precisely  as  he  may  bequeath  other 
property,  unless  he  is  prohibited  from  doing  so  by  the  contract 
of  insurance.     The  right  to  make  such  a  disposition  of  his 

'  Hicks  V.  Perry,  140  Mass.  580;  5     Burkhart,  Ind;    10    N.  E.   R.  79. 
N.  E   Rep.  634;  Presbjiorian,   etc.,        '^  Coleman  v.  Knights  of  Honor,  18 
Fund  V.  Allen,  106  Ind.  593;  7  N.  E.    Mo.  App.  189. 
R.    317;    Masonic  Mutual,     etc.  v. 
16 


242  BENEFICIARY.  [Chap.  12,  §209- 

property  is  given  to  a  member  by  the  laws  of  the  land,  and 
where  it  is  claimed  that  the  right  to  dispose  of  such  a  fund 
has  been  abridged,  or  entirely  taken  awa}',  by  the  terms  of  the 
contract  of  insurance,  the  burden  of  proving  such  an  abridg- 
ment or  relinquishment,  is  upon  the  person  making  such 
a  claim.  Yery  clear  and  binding  provisions  must  be  entered 
into  by  contract  to  deprive  a  member  of  such  a  right.' 
If  the  member  has  such  an  interest  in  the  fund,  and  there  is 
no  provisions  in  the  charter,  by-laws  or  certilicate  of  member- 
ship abridging  or  relinquishing,  either  in  express  terms  or  by 
necessary  implication,  his  right  to  dispose  of  the  fund  by 
will,  the  member  may  so  dispose  of  it,  either  by  specific  or 
general  devise;  and,  where  it  has  not  been  specifically 
bequeathed  in  the  will,  it  will  pass  under  a  general  residuary 
clause;  and  a  will  bequeathing  all  the  estate  of  the  testator,  in 
general  terms,  will  pass  the  fund. 

Where,  under  the  contract  of  insurance,  the  membei-  may 
change  his  benehciary,  and  there  is  no  provision  of  the  charter, 
by-laws  or  certificate  of  membership,  governing  the  manner 
and  mode  in  which  such  change  shall  be  made;  a  designation 
of  a  new  beneficiary  may  be  made  by  his  last  will  and  testa- 
ment.'' 

But,  as  will  be  seen  in  the  succeeding  pages  of  this  chapter, 
the  better  rule  seems  to  be  that,  where  the  society  provides  a 
certain  manner  and  mode  of  changing  the  beneficiary,  the  pre- 
scribed method  must  be  followed;  and  where  other  methods 
are  prescribed,  the  designation  may  not  be  made  by  will. 

§  309.  Where  the  right  to  devise  the  fund  is 
conferred  by  charter.  The  laws  of  Illinois  provide  for 
the  organization  of  societies  for  the  payment  of  "  benefits  to 
widows,  orphans,  heirs,  relatives  and  devisees  of  deceased 
members.'- 

A  society  organized  under  this  act  cannot,  by  provisions  in 
its  by-laws  or  certificates  of  membership,  restrict  or  limit  the 
right  of  a  member  to  designate  or  change  his  beneficiary  by 
will,  or  to  bequeath  the  fund  by  will  as  any  other  chose  in 
action.  A  by-law  of  such  a  society,  pointing  out  another  mode 
of  designating  or  changing  a  beneficiary,  is  subject  to  the 
right  of  a  member  to  designate  and  change  the  beneficiary  by 
will. 

^  Catholic  Ben.  Association  v.  "^  Kaiser  v.  Kaiser,  24  N.  Y.  Weekly 
Priest,  46  Mich.  429.  Dig.  410. 


■Chap.  12,  §210.]  beneficiaey.  243 

Thus,  in  Raub  v.  Masonic  Miit.  Relief  Association,  3 
Mackey  (D.  C.)  68,  an  association  was  organized  under  an  act 
of  Congress,  and  a  section  of  its  charter  provided  that  "  the 
particular  business  and  objects  of  such  society  or  corporation 
shall  be  to  provide  and  maintain  a  fund  for  the  beneiit  of  the 
widow,  orphans,  heir,  assignee  or  legatee  of  a  deceased  mem- 
ber, immediately  upon  proof  of  such  death,"  Another  section 
of  the  charter  authorized  the  directors  to  make  by-laws,  "  not 
■contrary  to  this  charter,  or  to  the  laws  of  the  United  States." 
One  by-law  provided:  "  No  change  of  beneficiary  can  be  made 
or  recognized  until  submitted  to  and  approved  by  the  board  of 
directors." 

A  member  named  his  sister  as  his  beneficiary,  with  the  con- 
sent and  approval  of  the  board  of  directors.  Afterwards  he 
made  a  will  directing  the  fund  to  be  paid  at  his  death  to  his 
illegitimate  son.  The  board  of  directors  had  no  knowledge  of 
this  change,  and,  on  the  death  of  the  member,  the  sister 
claimed  the  fund.  The  Supreme  Court  of  the  District  of  Col- 
umbia says:  "  The  validity  of  this  new  designation  is  pre- 
sented as  a  question  for  the  determination  of  the  court.  *  *  ^  * 
The  power  of  the  association  to  make  by-laws  was  limited  by 
the  charter  itself  to  such  by-laws  as  should  not  be  in  violation 
of  the  laws  and  constitution  of  the  United  States.  And  this 
would  have  been  the  case  even  had  it  not  been  provided  for  in 
the  charter.  JS^ow  one  of  the  laws  of  the  United  States  is  this 
very  charter,  the  second  section  of  which  provides  that  "  the 
particular  business  and  objects  of  such  society  or  corporation 
shall  be  to  provide  and  maintain  a  fund  for  the  benefit  of  the 
widow,  orphans,  heir,  assigns  or  legatees  of  a  deceased  mem- 
ber, immediately  upon  proof  of  such  decease."  That  pro- 
vision recognizes  fully  and  completely  the  right  of  a  member 
of  the  association  to  designate  the  beneficiary  by  his  will,  and 
that  power  cannot  be  cut  off  or  diminished  by  a  by-law.  So 
far,  then,  as  this  by-law  attempts  to  do  so,  it  is  itself  inopera- 
tive. *  *  *  *  "VV^e  must,  therefore,  give  effect  to  the 
recognition  contained  in  that  statute  of  the  ])ower  to  make  a 
bequest,  and  we  cannot  cut  it  down  by  any  construction  that 
we  might  give  to  this  by-law." 

§  310.     When    desijjfiiation  by  will  is    invalid. 

AVhere,  by  provision  of  the  charter,  the  fund  is  })ayable  to  cer- 
tain classes  of  beneficiaries,  not  including  devisees,  and  the 
assured  can  have  no  interest  in  the  benefit  resulting  from   his 


244  BENEFICIARY.  [ChAP.  12,  §211, 

membership;  where  it  is  not  payable  to  him  in  any  event,  and 
cannot  become  a  part  of  his  estate,  there  is  nothing  in  the 
insurance  contract  to  pass  by  will.' 

When,  in  the  charter,  by-laws  x)r  certificates  of  membership 
other  ways  of  changing  beneficiaries  are  named,  and  no  pro- 
vision is  made  for  changing  them  by  will,  the  latter  mode  will 
be  ineffectual  as  against  the  rights  of  the  beneficiary  named  in 
the  certificate.' 

Where  the  by-laws  of  a  mutual  benefit  society  provide  that 
the  designation  of  the  beneficiary  of  a  member  shall  be  made 
during  the  life-time  of  the  member,  and  be  approved  by  the 
directors,  a  designation  by  will  is  not  valid.  A  designation 
which  may  be  changed  by  a  member  at  pleasure  and  approved 
or  disapproved  by  the  directors  after  his  death,  is  not  within 
the  meaning  of  the  by-laws.^  Where  the  designation  must, 
under  the  contract  of  insurance,  be  reported  to  the  society 
for  registration  on  its  books,  prior  to  the  decease  of  the  mem- 
ber, the  last  will  and  testament  will  operate  as  a  sufficient 
designation  if  it  be  brought  to  the  notice  of  the  society  during 
the  lifetime  of  the  member.  In  such  a  case  it  will  be  good 
as  a  designation,  although  not  yet  operative  as  a  will," 

But  where,  in  such  a  case,  it  is  not  brought  to  the  notice  of 
the  society  until  after  the  member's  death,  it  is  ineffectual  as 
a  designation.^ 

§  311.    Power  of  appointment  reserved  to  the 

member.  Where  the  charter,  by-laws  or  certificate  of  mem- 
bership give  to  the  member  the  mere  power  of  appointing  a 
beneficiary  by  will,  the  power  of  appointment  must  be  exer- 
cised as  such,  and  the  fund  will  not  pass  as  a  part  of  the 
member's  estate  under  a  residuary  clause  of  his  will,  or  under 
a  will  merely  disposing  of  all  the  estate  of  the  testator. 

The  intention  to  execute  a  power  of  appointment  by  will 
must  appear  by  a  reference  in  the  will  to  the  power,  or  to  the 

'  Olmstead  v.  Masonic   Mut.  Ben.  ^  Daniels  v.  Pratt,  Mass.  10  N.  E. 

Soc.  Kan.  14  Pac.  Rep.  449;  Renk  v.  Rep.  166,  Supreme  Council  v.  Perry 

Herman  Lodge,  etc.  2  Demarest  (N.  Mass.  5  N.  E.  Rep.  634. 

Y.)409;   Catholic  Ben.  Association  '' Kepler  v.  Supreme  Lodsre   K.  of 

V.  Priest,  46  Mich.  429:  McChire,  v.  H.  45  Hun  (N.  Y.)   274;   Hellenberg 

Johnson,  56  Iowa  620;  10  N.W.  Rep.  v.   District   No.    1,  I.  O.  B.  B.  94  N. 

217;Bownv.  Catholic  Mutual    etc.  Y.  583. 

33  Hun   (N.  Y.)  263;    Swift  v.  San  ^  Hellenberg  v.    District    No.    1,. 

Francisco  Board,  67  Cal.  567.  supra. 

■■'See  authorities,  §§  223-224-225. 


OhAP.  12,  §212.]  BENEFICIARY.  245 

subject  of  it,  or  from  the  fact  that  the  will  would  be  inopera- 
tive without  the  aid  of  the  power.' 

When  the  will  of  a  deceased  member  affords  no  evidence  of 
a  desi^^n  to  execute  the  power  by  either  of  the  modes  laid  down 
in  this  rule;  when  it  neither  refers  to  the  power,  nor  to  the 
fiura  of  money  which  is  the  subject  of  it,  nor  is  inoperative 
for  want  of  property  to  give  it  effect  as  a  testamentary  act,  it 
will  not  pass  the  title  to  the  fund.'^ 

An  insured  person  had  four  policies  on  his  life,  in  one  of 
which  (the  Globe),  he  reserved  a  power  to  appoint  a  new  ben- 
eficiary. His  last  will  contained  the  following  clause:  "  My 
life  being  assured  as  follows:"  (setting  out  the  policies)  "I 
wish  to  divide  among  my  three  children  as  follows:"  (setting 
out  names  and  amounts.)  No  act  of  the  insured,  except  that 
provision  of  the  will,  was  set  up  as  an  attempt  to  execute  the 
reserved  power  of  substitution  of  a  new  beneficiary  under  the 
jjolicy  above  referred  to.  The  court  said:  "But  I  do  not 
<ionstrue  the  will  as  an  execution  of  the  power.  The  testator 
treated  as  his  own  property  four  policies  of  life  insurance,  all 
of  which  belonged  to  the  children  of  his  wife.  *  *  *  None 
•of  these  were  subject  to  his  bequest,  yet  he  attempted  to 
bequeath  them  all.  No  reference  is  made  to  the  power  of 
appointment  reserved  in  the  Globe  policy.  It  is  true  tliat  the 
policy  is  referred  to  by  name;  and,  under  some  of  the  authori- 
ties, a  plain  and  unambiguous  reference  to  the  subject  of  the 
power  has  been  held  sufficient  to  treat  the  devise  or  bequest 
of  tlie  property  as  an  execution  of  a  power  of  appointment. 
But  in  all  cases  to  which  the  attention  of  the  court  has  been 
called,  the  intention  of  the  testator  has  been  the  objective  point 
of  inquiry  and  construction.  It  is  impossible  to  impute  to 
this  testator  an  intention  to  execute  this  power.  His  intention, 
on  the  contrary,  clearly  was  to  bequeath  this  particular  policy, 
with  others  as  a  part  of  his  personal  estate.  This  controlling 
intent  is  inconsistent  with  any  idea  of  an  execution  of  the 
power." ' 

§  212.    Power   of  appointment    continued.     A 

by-law  of  a  society  provided  that  the  benefit  fund  stipuhited 

'  Sugden  on      Powers,    301-303;  v.  Clendenin,  44  Md.  429;  Arthur  v. 

1  Story's  C.   C    Rep.  427;    4   Kent  Odd  Fellows  etc.,  29  Ohio   St.  539; 

Com.  327  et  xeq.  Greeno  v.   Greeno,  23  Hun  478. 

-  Duviill   etc.  V.  Goodson,  79    Ky.         ^  Eiseinan  v.  .Judiih,  (U.  S.  C.  C 

224;  Hellenberij    v.    Dist.  No.  1  etc.  West     Dist  of    Tenn.)   4   Cent.   L. 

94  N.  Y.  580;  Md.   Mut    Ben.   Soc.  Jour.  345. 


246  BENEFICIARY.  [ChAP.  12,  ^'213, 

for  in  a  member's  certificate  "  may  be  disposed  of  by  his  last 
will  and  testament,  otherwise  it  shall  belong  to  and  be  paid  to- 
his  widow,  or  in  case  he  leaves  no  widow,  then  to  the  heirs  and 
legal  representatives  of  the  deceased,  and,  in  the  absence  of  such 
will,  and  in  case  such  member  leave  no  widow,  heirs  or  repre- 
sentatives, such  premium  shall  revert  to  the  company."  The 
court  held  that  the  power  reserved  to  the  testator  under  this 
by-law  to  dispose  of  the  amount  payable  at  his  death  was  in 
the  nature  of  a  power  of  appointment,  and  that  the  fund  would 
pass  onl}'  in  pursuance  of  a  clause  expressing  in  clear  and 
unmistakable  terras  the  intention  of  the  testator  to  divert  it 
from  the  purposes  to  which,  by  the  by-laws  of  the  association,, 
it  was  to  be  devoted.' 

The  charter  of  a  society  provided  as  follows: 
"  The  fund  created  in  section  9  for  the  benefit  of  the  widow 
and  children  of  the  deceased  member,  shall  be  paid  to  them  by 
said  company  as  soon  as  it  can  be  collected,  or  to  their  trustee,, 
in  the  discretion  of  the  company,  subject,  however,  to  be  appro- 
priated for  their  benefit  equally,  according  to  the  will  of  the 
deceased  member;  or  if  he  should  leave  no  widow  or  child,  then 
to  be  appropriated  according  to  his  will,  or  if  he  makes  no  will, 
and  leaves  no  widow  or  child,  it  shall  vest,  and  remain  in  the 
company,  and  be  added  to  its  capital  stock,  or  be  appropriated 
as  it  may  deem  expedient," 

An  insured  member  died  leaving  no  widow  and  no  child,  and 
it  was  claimed  that  the  contingency  therefore  existed,  in  which, 
under  the  charter,  he  had  power  to  dispose  of  the  proceeds  of 
his  membership  by  will,  and  that  he  had  so  disposed  of  the 
proceeds  by  the  clause  of  his  will  disposing  of  his  residuary 
estate.  But  the  court  held  that  the  charter  gave  the  member 
a  mere  power  of  appointment,  in  case  he  had  neither  wife  nor 
child,  that  the  assured  had  no  interest  whatever  in  the  fui)d, 
and  that,  therefore  the  fund  did  not  pass  under  a  will  merely 
disposing  of  all  his  estate,  but  in  which  no  mention  was  made 
of  the  fund  to  arise  from  his  membership.'' 

§  213.    Power  of  appointment   continued.      A 

testator,  by  his  will,  bequeathed  as  follows: 

"  After  the  payment  of  all  my  just  debts  and  funeral 
expenses  by  my  executor  out  of  my  estate,  I  devise  as  follows: 
I  give  and  bequeath  the  entire  residue  of  my  estate  to  my 

'  Greeno  v.  Greeno,  23  Hun  478. 
«  Duvall  V.  Goodson,  79   Ky.  224. 


Chap.  12,  §214.]  beneficiary.  247 

three  sisters,  E.  C.  A.,  M,  F.  S.,  and  G.  R.,  and  my  esteemed 
friend  M.  V.  L.,  each  of  them  to  have  and  receive  a  fourth 
part  thereof  absohitely." 

The  testator  left  neither  widow  nor  children,  and,  at  the 
time  of  his  death,  was  a  member  in  good  standing  of  an 
incorporated  mutual  benefit  society,  which,  by  its  charter, 
provided  for  the  payment  of  a  certain  sum  of  money  upon  the 
death  of  any  member,  "  to  the  widow,  child,  children,  or  such 
person  or  persons  to  whom  the  deceased  may  have  disposed  of 
the  same  by  will  or  assignment.  If  there  be  no  widow,  child 
or  children,  or  the  deceased  shall  have  made  no  disposition  by 
will  or  assignment  of  the  sum  accruing  upon  his  death,  then 
the  board  shall  appro]iriate  such  sum  as  may  be  necessary  for 
funeral  expenses,  and  all  excess  of  money  accruing  from  the 
death  of  such  member  shall  go  to  the  permanent  fund  of  the 
association." 

In  construing  this  provision  of  the  charter,  the  court  held 
that  the  fund  was  not  assets  of  the  estate  of  the  deceased 
member,  recoverable  by  his  administrator  or  executor — that 
the  widow,  child  or  children  of  the  member  were  the  bene- 
ficiaries designated  by  it,  subject  to  the  right  of  the  member 
to  appoint  other  beneficiaries — that  th\?<  jus  dispoiiendl  given 
by  the  charter  was  a  mere  power  of  a])pointment;  and  the 
court  further  held  that  the  will  of  the  testator  was  not  a  valid 
exercise  of  the  power,  since  the  intention  to  exercise  it  was 
not  expressed,  and  it  did  not  appear  that  there  was  no  other 
estate  upon  which  it  might  operate;  that  in  the  absence  of  a 
valid  exercise  of  the  ]>ower,  there  being  no  widow,  child  or 
children  of  the  deceased,  the  excess  of  the  fund,  after  payment 
of  funeral  expenses,  should  go  to  the  permanent  fund  of  the 
society.' 

§314.  Power  of  appoiiitiiieiit  contiiuied.  AVhere 
the  by-laws  of  a  society  ])rovide  that  the  l)enefit  fund  is  to  be 
paid  "  to  the  widow,  children,  mother,  sister,  father  or  brother 
of  tlie  deceased  member,  and  in  the  order  named,  if  not  other- 
wise directed  by  the  member  previous  to  his  death,"  the 
relatives  of  the  deceased  will  take  the  fund  in  the  order  named, 
unless  the  member,  in  his  life-time,  executed  such  power  of 
direction  or  appointment,  thus  changing  the  order  of  payment, 
and  the  will  of  a  member  who  died  seized  of  real  and  personal 

'Maryland  Mutual  Benevolent  Md.,  439;  See  Mory,  Exc'x.  v- 
Society,  I.  O.  R.  M.  v.  Clendinen,  44    Michael,  18  Md.,  241. 


24S  BENEFICIARY.  [ChAP.  12,  §215. 

property,  devising  and  bequeathing  to  his  children  "  my  estate 
and  property,  real,  ])ersonal  and  mixed,"  without  referring  to 
the  power,  or  the  subject  of  it,  is  not  such  an  execution  of  the 
power  as  will  control  the  fund;  and  the  other  provisions  of 
the  section  of  the  by-laws  above  quoted  control  the  fund,  and 
give  it  to  the  widow  of  the  testator,  who  is  named  as  the  first 
in  order,  and,  therefore,  the  preferred  beneficiary.' 

Where  the  constitution  of  an  unincorporated  voluntary 
society  provides  in  effect  for  the  creation  of  a  trust  fund,  from 
which,  upon  the  death  of  a  member,  a  payment  of  $10,000.00 
is  directed  to  be  made  to  such  person  or  objects  as  he  may 
have  designated  in  writing,  or  if  no  such  written  disposition 
has  been  made  by  him,  then  to  certain  specified  persons,  such 
fund  forms  no  part  of  the  estate  of  the  deceased  member,  and 
his  personal  representatives  cannot  maintain  an  action  to 
recover  it.° 


§215.  Power  of  appointinent,  contrary  doc- 
trine. The  charter  and  constitution  of  the  Knights  of 
Honor  declared  its  object  to  be  "  to  establish  a  benefit  fund, 
from  which  a  sum,  not  to  exceed  $2,000.00,  shall  be  paid,  at  the 
death  of  each  member,  to  his  family,  or  to  be  disposed  of  as 
he  may  direct,"  and  the  certificate  to  each  beneficiary  member 
provided  "that,  in  accordance  with,  and  under  the  provisions 
of  the  laws  governing  the  order,  the  sum  of  $2,000.00  shall  be 
paid,  *****  as  a  benefit,  upon  due  notice  of  his  death, 
to  such  person  or  persons  as  he  may  by  will,  or  entry  in  the 
I'ecord  book  of  this  lodge,  or  on  the  face  of  this  certificate, 
direct."  Chancellor  Cooper,  in  Weil  v.  Trafford,  3  Tenn.  Ch. 
108,  held  that,  by  the  terms  of  the  above  contract,  the  benefit 
fund  belonged  to  the  member's  estate,  and  passed  under  the 
residuary  clause  of  his  will,  disposing  of  "  the  balance  of  all 
my  property  of  every  kind."  The  learned  chancellor  quotes 
the  contract,  laying  particular  stress  upon  the  words — "  or  to 
be  disposed  of  as  he  may  direct  " — "  as  he  may  by  will 
direct" — and  says:  "The  right  to  the  fund  and  the  power  of 
the  beneficiary  to  dispose  of  it  in  his  lifetime,  and  by  will, 
could  not  possibly  be  recognized  more  clearly," 

This  decision  does  not  stand  in  line  with  the  authorities  just 
cited. 

'  Arthur  V.  Odd  Fellows  Beneficial  'Swift  v.  San  Francisco,  etc. 
Association  et  al.,  27  Ohio  State,  557.    Board,  67  Cal.,  567. 


Chap.  12,  §217.]  beneficiary.  249 

§  316.  When  power  to  designate  or  change 
beneficiary  is  exliansted.  Where  a  by-law  of  a  mutual 
benefit  society  provides  that  any  member  may,  in  a  certain 
manner,  change  his  beneficiary,  or  that  he  may,  in  a  certain 
manner,  designate  the  person  to  whom  the  benefit  fund  shall, 
on  his  death,  be  paid,  such  by-law  means  that  the  change  or 
designation  may  be  made  from  time  to  time,  at  the  pleasure  of 
the  member;  and  the  power  of  changing  or  designating  the 
beneficiary  is  not  exhausted  by  one  or  more  changes  or  desig- 
nations.' 

§  317.  Time  witliin  vvliicli  power  of  appoint- 
ment may  he  exercised.  As  the  beneficiary  of  a  mem- 
ber of  a  mutual  benefit  society  has  no  vested  right  in  the  cer- 
tificate of  membership,  it  follows  that  the  power  of  appoint- 
ment of  a  new  beneficiary,  reserved  to  the  member  in  the  con- 
tract of  insurance,  may  be  exercised  by  him  at  any  time  during 
the  existence  of  the  contract.  In  this  respect,  there  is  an  im- 
portant difference  between  the  power  of  appointment  reserved 
to  the  member  in  a  contract  of  insurance  in  a  mutual  benefit 
society,  and  such  a  power  reserved  in  an  ordinary  contract  of 
insurance.  In  the  ordinary  contract  of  insurance,  the  bene- 
ficiary has  a  vested  right,  and  any  power  of  a])pointment  of  a 
new  beneficiary,  upon  a  certain  contingency,  must,  upon  the 
happening  of  the  event,  be  exercised  at  once,  or  within  a 
reasonable  time.* 

'  Deady  v.  Bank  Clerk's  Mut.  Ben.  that  the  rights  of  the  children  of  the 

Association,  17  J.  A:.  S.  (N.  Y.  Sup'r.  wife,  in  such  cases,    become    upon 

Ct.)  246;    Union   Mutual   v.    Mont-  the  death    of  their    mother,    vested 

gomery,  Mich.  38  N.  W.  Rep.  588.  rights,  in  the  fullest    sense    of  the 

'■^  It  was  held  in  Eiseman  V.  Judah,  term.  This  is  not,  then,  a  case  in 
4  Central  Law  Journal  345,  that,  which,  like  most  cases  of  appoint- 
where  a  policy  is  payable  at  the  ment  under  a  power,  no  reason  can 
death  of  the  insured  to  his  wife,  if  be  assigned  for  an  immediate  execu- 
then  living,  or  if  not  living,  then  to  tion  of  the  power,  so  that  the  whole 
her  children,  with  the  proviso  "that  life-time  of  the  donee  of  the  power 
in  case  of  the  decease  of  his  wife  is  allowed  for  its  execution.  Here, 
during  the  life-time  of  the  assured  there  are  rea.sons  for  a  prompt  ex- 
the  said  assured  may,  at  his  option,  ecution ;  for,  if  the  power  be  exe- 
substitute  any  other  beneficiary  un-  cuted,  the  rights  under  the  policy 
der  this  policy,"  such  sub.stitution  ;ili-eady  existing  are  to  be  taken 
must  be  made  upon  the  decease  of  awa}'.  Within  what  time,  then,  will 
the  wife,  or  within  a  reasonable  the  law  allow  the  act  of  Ackerman 
time  thereafter;  it  may  not  be  made  to  take  away  the  rights  thus  already 
after  the  date  fixed  for  the  next  en-  vested,  by  the  death  of  his  wife,  in 
suing  payment  of  premium  on  the  her  children  V  This  period  cannot 
policy.  The  court  says:  "All  the  be  indefinite.  Justice  and  equity 
authorities  upon  life  insurance  agree  require  that  the    ])ower    thus    con- 


250  BENEFICIARY.  [ChAP.  12,  §218. 

§  318,    Designation    by    special    direction.     A 

member  of  a  lodge  of  the  Knights  of  Honor  had  issued  to 
liim  a  benefit  certificate,  in  the  sum  of  $2,000.00,  to  be  paid, 
on  his  death,  to  such  person  or -persons  as  he  might,  l)y  will,  or 
entry  on  the  record  book  of  the  lodge,  or  on  the  face  of  the 
certificate,  direct.  Before  his  marriage,  he  indorsed  upon  the 
certificate,  the  following  :  "  To  the  officers  and  members  of 
the  Supreme  Lodge,  Knights  of  Honor.  Brothers,  it  is  my 
will  that  the  benefits  named  in  this  certificate  be  paid  to  my 
sister,  J.  H.,"  to  which  his  name  was  subscribed,  and  the 
same  was  attested  by  two  witnesses.  This  indorsement  was 
all  printed  except  the  words,  "  my  sister  J.  H.,"  but  the  certi- 
ficate with  the  endorsement  was  never  delivered  to  the  sister. 
His  widow  claimed  that  this  indorsement  was  a  will  which  was 
revoked  by  his  subsequent  marriage.  The  Supreme  Court  of 
Illinois  held  that,  in  view  of  the  circumstances  stated,  it  could 
not  be  regarded  as  a  will,  but  a  special  direction  to  whom  the 
benefit  should  be  paid,  in  one  of  the  modes  authorized  by  the 
constitution  of  the  lodge  and  the  certificate.' 

The  charter  of  a  mutual  benefit  society  provided  that  the 
beneficiary  fund  should  "  be  paid  over  to  the  families,  heirs  or 
representatives  of  deceased  members^  or  to  such  person  or  per- 
sons as  such  deceased  members  may  while  living  have  direc- 
ted." Authority  was  also  given  to  regulate  such  payments  by 
by-law.     One  of    the  by-laws  directed  the  fund  to  be  paid  to 

ferred  shall  be  exercised    at    some  could  be  accomplished  a  year   after 

precise  time,  in  order  that  the  fact  those     rights     accrued,    it     might 

of  its  exercise  may  be  duly  made  equally     well     be    postponed     for 

known  to  all  persons  interested ;  and  twenty  years,  during    which    time 

no    further  latitude  can  be  allowed  the  beneficiaries    might    pay    forty 

to  the  donee  of    the   power,  than  to  semi-annual   premiums,  instead    of 

give  him  a  reasonable    time  within  one  as  in  this  case, 

which  he  shall  act  under  it,  if  at  all.  I  am  constrained  to  hold  the  pro- 

This  reasonable  time  may    well    be  vision  for  such  an  appointment,  "in 

the  period  ending  with  next  ensuing  case  of  the  decease  of  the  wife"  to- 

payraent  of  prernium.     At  that  date  mean  "upon  tlie    decease,"  indicat- 

the  policy  will    lapse   by  its    own  ing  that  event  as  the  proper  time;  and 

terms,   unless  a    new    premium    is  to    treat  the  time  of    the  next    suc- 

paid.     Such  payment  will  continue  ceeding  payment  of  premium  as  the 

the  policy  in  force,  and  will  thus  be,  latest  hour  which  can  equitably  be 

in  some  sense,  the  making  of  a  new  allowed  for  a  divestiture    of  rights 

contract.  theretofore  existing  " 

The  beneficiaries  may  well  wish  'Highland  v.  Highland,  109  111. 
to  know  whether  the  policy  is  to  366 ;  Under  the  decisions  of  Ten- 
continue  in  force  for  their  benefit,  nessee,  such  a  designation  might  be 
or  whether  their  interest  is  to  cease,  held  to  be  a  will ;  McLean  v.  McLeau 
If  the  divestiture  of  their  rights  by  6  Hump.  452 ;  Tennessee  Lodge  v- 
the  appointment  of  a  new  benticiary  Ladd,  5  Lea.  716. 


Chap.  12,  §219.]  beneficiary.  251 

the  person  or  persons  last  named  by  the  deceased,  and  entered 
by  his  order  on  the  "  will  book."  The  deceased  member  had 
had  an  entry  made  in  the  "  will  book  "  directing  the  fund  to 
be  paid  to  his  brother.  Afterward  he  made  a  will  by  which 
he  gave  and  devised  his  interest  in  said  fund,  after  payment 
of  his  just  debts  and  funeral  expenses  to  the  same  brother. 
The  administrator  with  the  will  annexed  of  the  deceased 
brother  brought  an  action  to  recover  the  fund,  claiming  that 
the  will  of  the  deceased  revoked  the  appointment  made  in  the 
"  will  book,"  and  made  the  fund  subject  to  the  payment  of 
the  testator's  debts. 

But  the  court  held  that  the  brother  took  the  fund  by  virtue 
of  the  special  designation  in  the  "will  book,"  and  that  the  will 
was  inoperative,  and  did  not  subject  the  fund  to  payment  of 
the  member's  debts.' 

§  319.  Delivery  of  certificate  to  beneficiary  not 
necessary.  When  a  member  of  a  society  has  appointed  a 
beneficiary  in  any  of  the  modes  pointed  out  in  the  contract  of 
insurance,  it  is  not  necessarj^  that  the  certificate  of  membership 
should  be  delivered  to  the  beneficiary  so  named.  The  claim 
of  the  beneficiary,  in  such  a  case,  is  not  based  on  a  contract,  but 
upon  the  appointment  and  direction  for  the  payment  of  the 
fund. 

Where  the  benefit  certificate  of  a  member  was  made  payable 
at  his  death  to  such  person  as  he  should  direct  on  the  face  of 
the  certificate,  and  the  member,  on  the  face  of  the  certificate, 
directed  that  the  benefit  fund  should  be  paid  to  a  certain 
person,  and  retained  possession  of  the  certificate  until  his 
death,  it  was  held  that  the  beneficiary  so  designated  took  the 
fund  by  appointment,  and  that  no  delivery  of  the  certificate  in 
the  life  time  of  the  member  was  necessary.''' 

1  Bown  V.  Catholic  Mutual  etc.,  33  "^  Highland  v.  Highland,  109  HI., 
Hun  (N.  Y.)  263.  366 ;  13  111.  App.,  510. 


252  BENEFICIARY.  [Chap.  12,  §221. 


Designation  of  Beneficiary. — Part  II. 


CHANGE    OF   BENEFICIARY. 


Sec.  220.     Provisions  of  the  charter  concerning  changes  of  beneficiaries. 

Q^ ^'  ooo  I  Provisions  of  the  by-laws  concerning  changes  of  beneficiaries. 

Sec  223.  }  Authorities  holding  such  provisions  of  the  by-laws  to  be 

Sec  226.  \         mandatory  and  exclusive. 

Sec  227.  [  Authorities  holding  such   provisions  of  the  by-laws  to  be 

Sec.  228.  \         directory  merely. 

Sec.  229.     When  the  society  will  be  deemed  to  have  waived  defects  in 

the  form  of  the  designation  adopted  bj'  a  member. 
Sec.  230.     Inoperative  change  of  beneficiary  does  not  revoke  original 

designation. 
Sec  231.     Fraudulent  change  of  beneficiary. 

§  220.  Provisions  of  cliarter  concerning-  changes 
of  beneficiaries.  When  the  charter  provides  the  manner 
and  mode  of  designating  or  changing  the  beneficiary,  and 
the  extent  to  which  such  changes  may  be  made,  these 
provisions  must  be  strictly  complied  with,  on  the  familiar 
ground  that  a  corporation  is  the  creature  of  its  charter,  and  it 
is  not  within  the  power  of  the  corporation  or  its  members,  or 
both,  to  waive  a  strict  compliance  with  the  requirements 
thereof.' 

§  22 1.  Provisions  of  by-laws  concerning  clianges 

of  beneficiaries.  When  a  mutual  benefit  society  has 
•adopted,  by  its  by-laws,  a  particular  method  of  changing  a 
beneficiary,  under  the  powers  and  within  the  limits  of  its 
charter,  no  change  of  beneficiary  can  be  made  in  any  other 
mode  or  manner. 

The  reason  for  this  rule  is  not  difficult  to  discover.  It  is 
based  upon  the  familiar  maxim  that  the  expression  of  one 
thing  excludes  other  and  different  things. 

'  Head  v.  Providence  Ins.  Co.,  2  p.  9 ;  Leonard  v.  American  Ins.  Co.. 
•Cranch,  127 ;  1  Phillip's  Insurance,     97  Ind.,  299. 


Chap.  12,  §222.]  beneficiary.  253 

When  a  society  frames  a  set  of  rules  providing  for  the  dis- 
tribution of  a  fund,  and  for  tlie  rights  of  beneticiaries  and 
members,  it  must  be  assumed  tliat  it  excludes  every  other 
mode  and  manner.  Any  other  conclusion  would  lead  to  the 
most  interminable  confusion  in  the  law  applicable  to  the  dis- 
tribution of  such  funds,  and  fritter  away  funds  created  for  the 
beneiit  of  widows,  orphans  and  heirs,  in  the  expenses  of 
uncertain  litigation.  But  there  is  still  another  reason.  It 
cannot  be  said  that  a  beneficiary  named  in  a  certificate  has  no 
rights  therein  because  he  has  no  vested  rights.  The 
beneficiary  has  a  right  to  the  proceeds  of  the  certificate  of 
insurance,  subject  to  the  right  of  the  member  to  change  the 
beneficiary,  according  to  the  terms  of  the  by-laws  and  regula- 
tions of  the  society,  which  are  a  part  of  the  contract  of  insur- 
ance; and  the  right  of  the  beneficiary  to  have  this  contract 
carried  out  in  the  manner  provided  for  is  as  binding  upon 
the  member  as  his  right  to  change  the  beneficiary  is  binding 
upon  the  beneficiary  and  the  society.'  The  power  reserved 
to  the  member  to  change  the  beneficiary  qualifies  the 
rights  of  the  beneficiary  in  the  contract.  It  makes  the  inter- 
est of  the  beneficiary  a  mere  expectancy  while  the  power 
to  revoke  the  appointment  as  beneficiary  of  the  contract 
continues;  but  this  expectancy  becomes  an  absolute  right  upon 
the  death  of  the  member,  unless  he  has,  in  the  manner  pre- 
scribed, defeated  it  by  the  affirmative  act  of  changing  the  ben- 
eficiary. 

§  333.      Provisions    of    by-laws    continued.      It 

cannot  truly  be  said  that  the  interests  of  a  beneficiary 
may  be  brought  to  an  end  at  any  time,  at  the  will  of  a  mem- 
ber. It  requires  more  than  the  will  and  the  intention  of  the 
member  to  accomplish  the  change. 

A  contract  of  insurance  required  that  any  member  desiring 
to  make  a  direction  as  to  payment  of  the  benefit  fund,  different 
from  that  stated  in  the  certificate,  might  do  so  in  a  prescribed 
form,  to  be  attested  by  the  recorder  of  the  lodge,  and  reported 
to  the  grand  lodge,  upon  the  surrender  of  the  old  certificate. 

A  member,  believing  himself  dying,  and  desiring  to  change 
the  designation  from  his  sister  to  his  wife,  told  a  friend  that  he 
wished  this  change  to  be  made,  and  asked  him  to  have  the 
forms  gone  through  with.     Before  anything  was  actually  done 

'  Coleman  v.  Supreme  Lodge  K.  Guardian  v.  Taylor  et  nl.,  Ill  Ind., 
ofH.,  18   Mo.  App.,   189;   Holland,     121;  12  N.  E.  Rep.,  IIG. 


254  BENEFICIARY.  [Chap.  12,  §223. 

he  died,  and  the  benefit  fund  was  declared  to  be  the  property 
of  the  sister.' 

It  requires  some  affirmative  act  on  the  part  of  the  member 
to  change  the  designation;  his  will  and  intention  will  not 
work  the  change.  AH  tendency  to  confusion  and  uncertainty 
is  avoided  by  requiring  this  change  to  be  made  in  conformity 
with  the  terms  of  the  contract. 

The  authorities  on  this  point  are  conflicting,  but  this  seems 
to  be  the  better  rule. 

§  2^3.  Authorities  holding  such  pro\dsions  of 
tlie  by-laws  to  be  mandatory  and  exclusive.    The 

by-laws  of  the  Knights  of  Honor  provided  that  a  member  who 
desired  to  change  the  beneficiary  named  by  him,  might  surren- 
der his  certificate,  and  procure  a  new  certificate  to  be  issued  to 
the  new  beneficiary,  on  payment  of  a  fee  of  fifty  cents.  A 
member  just  before  his  death  gav^e  the  following  direction: 

"  To  Herman  Lodge,  etc.,  Knights  of  Honor: 

Officers  and  Members  :  Please  take  notice  that  I  do 
hereby  revoke  the  direction  given  in  my  benefit  certificate  in 
reference  as  to  whom  the  money  should,  after  my  death,  be 
paid,  and  I  do  liereby  order  and  direct  that  the  money  be 
divided  as  directed  bv  me  in  my  last  will  and  testament,  exe- 
cuted by  me  on  the  17th  of  October,  1882." 

This  direction  was  signed  by  the  member.  The  court  held 
that  a  change  of  beneficiary  could  only  be  made  by  a  compli- 
ance  with  the  rules  of  the  society,  and  that  the  above  direction 
and  the  will  of  the  member  were  inoperative,' 

A  by-law  of  the  Supreme  Lodge  of  Knights  of  Honor  pro- 
vided as  follows  : 

"  A  member  may,  at  any  time,  while  in  good  standing,  sur- 
render his  benefit  certificate,  which,  together  with  a  fee  of 
fifty  cents,  shall  be  forwarded  by  the  reporter  of  his  lodge 
under  seal  to  the  supreme  reporter,  who  shall  thereupon  cancel 
the  old  certificate  and  issiie  a  new  one  in  lieu  thereof  to  such 
member,  payable  as  he  shall  have  directed,  *  *  *  *  provided, 
no  benefit  certificate  shall  be  reissued,  except  as  herein  pro- 
vided, unless  satisfactory  proof  of  loss  of  the  former  benefit 
certificate  is  furnished  the  supreme  reporter.  When  a  second 
■certificate  is  issued,  the  first  one  shall  be  void." 

Mreland  v.  Ireland,  35  N.  Y.,  '^  Renk  v.  Herman  Lodge, 2  Dem- 
Weekly  Dig.,  335.  arest  (N.  Y.)  409. 


Chap.  12,  §224.]  bejsteficiaky.  255 

A  member  took  out  a  benefit  certificate  payable  to  his  wife, 
and  delivered  it  to  her.  Just  prior  to  his  death,  desiring  to 
change  the  disposition  made  of  his  benefit,  he  gave  notice  to 
the  officers  of  the  subordinate  lodge,  of  which  he  was  a  member. 
In  tliat  notice  he  stated  that  he  surrendered  the  former  cer- 
tificate, and  requested  that  a  new  one  be  made  out  and  deliv- 
ered to  him,  payable  to  plaintiffs.  The  old  benefit  certificate 
remained  in  possession  of  his  wife;  he  never  demanded  it  of 
her;  his  offer  to  surrender  was  not  accompanied  with  the  cer- 
tificate itself,  and  there  was  no  pretense  that  it  was  lost. 

Prior  to  the  institution  of  the  suit,  the  society  paid  the 
widow  the  benefit  fund  on  the  old  certificate  which  she  there- 
upon surrendered  to  the  society.  Plaintiffs  brought  suit  as 
beneficiaries  of  the  new  certificate.  The  court  held  that  as  the 
change  of  beneficiaries  had  not  been  made  in  the  manner  pre- 
scribed by  the  by-laws,  the  rights  of  the  original  beneficiary 
had  not  been  affected,  and  that  the  society  was  not  liable  to  the 
beneficiaries  on  the  new  certificate.' 

A  by-law  of  the  Royal  Arcanum  provided  as  follows : 

"  A  member  may  at  any  time,  when  in  good  standing,  sur- 
render his  benefit  certificate,  and  a  new  certificate  shall  there- 
after be  issued,  paj^able  to  such  beneficiary  or  beneficiaries 
dependent  upon  him  as  such  member  may  direct." 

The  assured  did  not  surrender  his  certificate,  but  made  a 
will  in  which  he  directed  the  money  due  thereon  to  be  paid  to 
others  than  the  beneficiary  named  therein. 

The  Supreme  Court  of  Indiana  held  that,  in  the  absence  of 
any  provision  in  the  certificate  or  by-laws  authorizing  the 
assured  to  change  the  beneficiary  otherwise  than  by  surrender 
of  the  certificate,  the  designation  by  will  was  inoperative,  and 
the  beneficiary  named  in  the  certificate  was  entitled  to  the 
proceeds  thereof.'' 

§  334.  Authorities  continued.  A.  was  a  member 
of  a  benevolent  association  which  paid,  upon  the  death  of  a 
member,  a  sum  of  money  to  his  wife,  or  to  his  children,  or  if 
he  left  neither  wife  nor  children,  to  such  person  "  as  he  may 
liave  formal!}^  designated  to  his  said  lodge  ])rior  to  his  decease." 
A.,  who  had  neither  wife  nor  children,  formally  designated  his 
mother,  who  died  before  A.'s  death.  By  his  will  he  had  desig- 
nated his  brother  as  the  person  who  was  to  receive  the  benefit, 

'  Coleman  v.  Supreme  Lodge  K.  -  Holland,  Guardian  v.  Taj-lor 
of   H.  18  Mo.  App.  189.  et  al.  11 1  lud.  121 ;  13  N.  E.  Rep.  116. 


256  BENEFICIARY.  [Chap.  12,  §225. 

but  the  court  held  that  this  was  not  such  a  designation  as  was 
contemplated,  and  that  the  benefit  lapsed  to  the  society.' 

The  beneficiary  article  of  a  society  provided  that  any  member 
desiring,  at  any  time,  to  make  a  new  direction  as  to  the  pay- 
ment of  his  benefit  fund,  might  do  so  by  authorizing  such 
change  in  writing  on  the  back  of  his  certificate  in  the  form 
prescribed,  which  was  printed  on  the  l)ack  of  each  certificate, 
attested  by  the  recorder,  with  the  seal  of  the  lodge  attached, 
and  by  the  payment  to  the  grand  lodge  of  the  sum  of  fifty  cents. 
A  member  did  not  make  a  change  in  the  beneficiary  of  his 
certificate  as  provided,  but  attempted  in  his  last  will  to  desig- 
nate a  new  beneficiary,  but  the  court  held  that,  in  making  a 
new  direction  of  payment  and  designation  of  beneficiary,  the 
prescribed  form  must  be  followed,  and  that  the  will  was  inop- 
erative as  to  such  direction  and  designation.^ 

§  225.  Authorities  continued.  An  association,^ 
organized  under  the  laws  of  Kansas,  for  the  purpose  of  giving 
aid  to  the  widows,  orphans  and  dependents  of  deceased  mem- 
bers, issued  a  certificate  of  membership  payable  to  the  mem- 
ber's wife,  or  her  legal  representatives.  The  wife  died  in  the 
lifetime  of  the  member.  In  the  by-laws  and  certificate  of 
membership  no  provision  was  made  for  a  change  of  benefici- 
ary, but  section  76,  chapter  93,  Laws  of  Kansas,  1871,  pro- 
vides that  "  in  case  any  life  insurance  company  organized 
under  the  laws  of  this  state  shall  have  issued,  or  may  hereafter 
issue,  any  policy  of  insurance  upon  the  life  of  any  person  or 
persons  for  another's  benefit,  and  such  beneficiary  dies  during 
the  lifetime  of  the  person  or  persons  whose  life  or  lives  are 
assured  by  said  insurance  policy  or  policies,  then  it  shall  be 
lawful  for  such  company  to  receive  from  the  person  or  persons 
whose  lives  are  assured,  an  affidavit,  setting  forth  the  facts  in 
the  case;  and  if  it  shall  appear  from  such  affidavit  that  the- 
affiants  have  theretofore  paid  the  annual  premium  on  such 
policy  or  policies,  and  intended  thereby  to  insure  for  the  bene- 
fit of  the  person  or  persons  named  in  such  policy  or  policies 
as  beneficiary,  that  such  person  or  persons  are  dead,  and  that 
said  policy  or  policies  have  not  been  assigned  or  transferred  to 
any  person  or  persons,  and  nominating  or  appointing  some 

'  Hellenberg  v.  District  No.  1  etc.  Knights  of   Honor    v.     Nairn,    60 

94  N.  y  580.  Mich.  44;  26  N.  W.  Rep.  826;  Renk 

'^  Vollman's  Appeal  92Pa.  St.  50-  v.  Herman   Lodge  etc.,  2  Demarest 

See  also  Stephenson  v.  Stephenson  (N.  Y.)  409. 
64  Iowa  534;    21    N.  W.  Rep.  19; 


Chap.  12,  §226.]  beneficiary.  257 

other  person  or  persons  as  beneficiary  in  place  of  the  said  de- 
ceased in  said  policy  or  policies  named,  it  shall  then  be  the 
duty  of  said  insurance  company  to  take  up  and  cancel  said 
policies,  at  the  request  of  said  assured,  and  issue  in  like  terms 
another  policy  or  policies  upon  the  life  or  lives  of  said  insured 
for  the  beneiit  of  the  benehciary  in  said  affidavit  nominated.'^ 

The  member  aftei-  the  death  of  his  wife  made  no  affidavit  as 
prescribed  in  said  section,  nor  did  he  take  any  steps  to  appoint 
any  person  as  beneficiary  in  place  of  his  deceased  wife,  except 
that  he  undertook  to  dispose  of  the  benefit  arising  from  his 
membershi])  by  will. 

The  Supreme  Court  of  Kansas  held  that  the  will  was  inef- 
fectual to  dispose  of  the  money  payable  on  account  of  his  death, 
or  to  divert  the  same  from  the  legal  representatives  of  his  de- 
ceased wife,  and,  in  deciding  the  question,  said: 

"  This  statute  applies  to  the  defendant  society.  It  was  en- 
acted prior  to  the  making  of  the  contract  in  question,  and  the 
parties  must  be  held  to  have  contracted  with  reference  to  it. 
It  prescribes  the  manner  by  which  the  member  may  designate 
a  beneficiary  where  the  one  first  appointed  has  deceased ;  and 
it  appears  to  be  the  only  mode  prescribed.  We  think  the 
maxim,  expressio  unius  est  exelusio  alterius,  applies;  and, 
as  the  prescribed  mode  has  not  been  followed,  no  change  was 
actually  made,  and  therefore  -the  benefit  must  be  paid  accord- 
ing to  the  terms  of  the  contract.  The  assured  has  no  interest 
in  the  benefit  resulting  from  his  membership.  In  no  event 
was  it  payable  to  him,  nor  could  it  become  a  ])art  of  his  estate; 
and,  having  no  interest  in  the  fund,  what  was  there  for  him  to 
bequeath?"  ' 

§  336.  Authorities  continued.  Where  the  con- 
stitution of  a  society  prescribes  the  method  by  which  the  bene- 
ficiary named  in  a  certificate  of  membership  may  be  changed, 
this  is  a  part  of  the  contract  of  insurance,  and  the  member 
cannot  make  any  change  of  beneficiaries,  except  by  complying 
with  this  method.  The  beneficiary  of  a  contract  of  insurance, 
who  is  affected  by  an  attempted  change  of  beneficiaries,  may 
av^ail  himself  of  the  failure  of  the  insured  to  comply  with  the 
contract,  as  well  as  the  company  with  whom  it  is  niade.^ 

The  by-laws  of  a  society  provided  that  a  member  might 
change  his  beneficiary  by  surrendering  his  certificate,  and  re- 

'  Olmstead  v.  Masonic  Mut.  Ben.  '  Wendt  v.  Iowa  Logion  of  Honor, 
Soc,  Kans. ;    14  Pac.  Rep.  449.  Iowa;    34  N.  W.  Rep.  470. 

17 


258  BENEFICIARY.  [Chap.  12,  §226. 

ceiving  a  new  one  payable  according  to  his  directions,  "  said 
surrender  and  directions  to  be  made  on  tlie  back  of  tlie  benelit 
certificate  surrendered,  signed  by  the  member,  and  attested  by 
the  reporter  under  seal  of  the  lodge."  The  printed  form  on 
the  back  of  a  member's  certificate  was  filled  up  and  signed  by 
him,  making  it  payable  to  another  person  than  the  one  named 
in  the  certificate,  but  it  was  not  attested  by  the  reporter.  After 
the  death  of  the  member,  the  certificate  was  found  thus  en- 
dorsed among  his  papers  together  with  a  letter  as  folloM's: 

"  Port  Huron,  March  25,  1884. 
Reporter  of  Integrity  Lodge,  Knights  of  Honor. 

Sir: — I  'desire  to  have  the  beneficiary  in  my  certificate  of 
membership  changed  from  Mrs.  F.  F.  Kichardson  to  George 
Iv.  Nairn,  in  trust;  and  in  the  event  of  my  death,  two  thou- 
sand dollars  to  be  paid  to  him.  Harry  Traver." 

Upon  these  facts,  the  Supreme  Court  of  Michigan  said : 
"  In  our  opinion,  Traver  never  surrendered  this  certificate, 
and  never  attempted  to  surrender  it,  within  either  the  letter 
or  the  spirit  of  its  conditions,  and  the  right  of  Mrs.  Richard- 
son remains  as  originally  provided  for.  *  *  *  *  "We 
dispose  of  the  case  purely  on  legal  grounds,  which  leave  us, 
in  our  opinion,  no  choice  in  the  matter.  The  contract  is  one 
which  the  parties  made  on  theiv  own  conditions,  and  every 
one  is  bound  by  them."  ' 

A  certificate  of  membership  in  the  Knights  of  Honor  stipu- 
lated that  the  supreme  lodge  would  pay  a  certain  sum  of 
money  to  such  person  or  persons  as  the  member  might,  by 
will,  or  entry  on  the  record  of  the  lodge,  or  on  the  face  of  the 
certificate  direct  the  same  to  be  paid,  etc.  On  the  face  of  the 
certificate  the  member  directed  that  the  fund  be  paid  to  his 
sister.  There  was  found  in  the  pocket  of  the  member  the  day 
before  his  death,  the  following  writing  signed  by  the  member: 

"  To  my  Dear  Wife; 

I  want  you  to  have  all  my  effects,  everything.     I  give 
everything  to  my  wife." 

The  Supreme  Court  of  Illinois  held  that,  as  the  member 
had  by  previous  indorsement  disposed  of  the  benefit  fund  by 
directing  to  whom  it  should  be  paid,  in  the  precise  mode  in 
which  the  rules  of  the  lodge  required  the  direction  should  be 

'Supreme    Lodge    v.    Nairn,    60 
Mich.  44;  26  N.  W.  Rep.  826. 


Chap.  12,  §227.]  beneficiary.  259 

made,  this  writing  addressed  to  the  wife  did  not  operate    to 
dispose  of  the  benelit.' 

§  237.  Authorities  lioldiiig-  such  provisions  of 
the  by-laws  to  be  directory  merely.  As  has  been 
said,  the  authorites  are  not  by  any  means  unanimous  on  this 
point,  and  those  holding  that  such  prescribed  methods  are 
directory  merely  are  here  given. 

A  by-law  of  the  American  Legion  of  Honor  provided: 

"  Members  may  at  any  time,  when  in  good  standing,  sur- 
render their  certificate,  and  have  a  new  one  issued,  payable  to 
such  beneficiary  or  beneficiaries  dependent  upon  them  as  they 
may  direct,  upon  payment  of  a  certificate  fee  of  fifty  cents."  A 
member  took  out  a  policy  payable  to  his  father  and  mother. 
Without  attempting  tO' make  any  change  of  beneficiaries  as 
provided  in  this  by-law,  he  made  a  will  bequeathing  the  pro- 
ceeds of  his  certificate  to  his  wife  and  children,  and  soon  after- 
ward died.  The  benefit  fund  was,  by  agreement  of  parties, 
placed  in  bank  by  the  association,  subject  to  the  judgment  of 
the  court  in  the  suit  between  the  father  and  mother,  on  the 
one  hand,  and  the  executors  of  the  will  and  guardians  of  the 
children,  on  the  other  hand.  In  discussing  the  above  by-law 
and  its  effect  on  the  change  of  beneficiaries,  the  court  says: 

"A  method  by  which  he  may  accomplish  the  change  to  the 
satisfaction  of  the  order  is  pointed  out  in  the  section  last  re- 
cited, but  we  do  not  consider  this  as  exclusive  of  all  other 
ways  of  effecting  the  same  object.  The  design  of  this  section 
is  to  protect  the  interests  of  the  corporation.  The  company 
are  entitled  to  know  who  are  the  parties  entitled  to  the  benefit 
money,  and  this  is  an  effectual  and  certain  means  of  giving 
that  information.  But,  like  all  such  provisions  in  the  by-laws 
of  private  corporations,  it  may  be  waived  at  the  option  of  the 
corporation,  l)eing  for  its  benefit  alone.  *  *  *  *  *  As  a 
by-law  of  the  order,  this  provision  entered  into  the  UTiderstand- 
ing  between  the  company  and  the  member,  effecting  the  insur- 
ance, and  the  rights  of  interested  parties  are  not  strengthened 
by  the  fact  that  the  same  provision  is  found  in  the  certificate. 
It  is  still  a  condition  for  the  benefit  of  the  company,  to  be 
insisted  upon  or  waived  according  to  their  election. 

The  provision  in  the  In'-laws  of  the  Legion  of  Honor  as  to 
changing  the  beneficiaries  of  a  benefit  certificate  is  not  ])er- 

'  Hisihland  v.  Hiirhlami,  109  111. 
366 ;  See  Elsey  v.  Odd  Fellows  etc. 
Mass.  7  N.  E.  Rep.  844. 


260  BENEFICIARY.  [Chap.  12,  §228. 

emptory,  but  merely  points  out  a  method  which  shall  satisfy 
the  company  as  to  the  parties  entitled  to  receive  the  benelit 
money.  The  suit  is  not  between  the  claimant  of  this  money 
and  the  corporation  by  whom  it  is  to  be  paid,  and  the  latter 
does  not  object  to  the  manner  fn  which  the  change  of  bene- 
ficiaries was  made.  The  exact  case  before  us  seems  to  be  one 
of  first  impression;  we  have  been  furnished  with  no  author- 
ities precisely  in  point  by  the  able  and  distinguished  counsel 
who  have  represented  the  respective  parties  to  the  cause,  al- 
though their  briefs  show  great  research  for  that  purpose,  nor 
have  we  been  able  to  find  any  bearing  upon  the  question.  *  * 
We  think  that  as  between  the  parties  to  this  suit  the  change 
of  beneficiaries  was  fully  effected  by  the  will."  ' 

§  338.  Authorities  contiriuecl.  In  Lamont  v. 
Hotel  Men's  Mut.  Ben.  Association,  30  Fed.  Eep.  817,  Judge 
Blodgett  held  that,  Avhere,  under  the  articles  of  association 
and  by-laws  of  a  mutual  benefit  society,  the  benefits  are  pay- 
able to  the  person  designated  by  the  member  in  his  application 
for  membership,  or  his  last  will  and  testament,  it  is  competent 
for  such  member  by  his  own  act,  and  with  the  consent  of  the 
company,  at  any  time  before  his  death,  without  the  formalities 
of  a  will,  to  make  a  transfer  of  the  benefit  from  the  original 
beneficiary  named  to  any  other  person  he  may  select.  In  this 
case  the  learned  judge  neither  cites  authorities,  nor  gives  the 
reasons  upon  which  his  decision  is  founded. 

In  Manning  v.  A.  O.  U.  W.,  Ivy.;  5  S.  W.  Eep.  385,  the  con- 
tract provided  that  the  beneficiary  might  be  changed  by 
proper  authorization  on  the  back  of  the  certificate,  or  by  the 
surrender  of  the  old  certificate,  and  the  issue  of  a  new  one. 
The  member  married  subsequent  to  the  issue  of  his  certifi- 
cate, and  wrote  to  the  proper  officer:  "Please  find  enclosed 
my  dues  of  Lodge  No.  2,  A.  O.  U.  W.,  three  dollars;  and  in 
return  please  send  my  policy  made  out  to  Mrs.  Josie  A. 
Manning."  The  member  neglected  to  forward  the  requisite 
fee  of  fifty  cents  for  making  the  change,  and  the  proper  officer 
of  the  lodge  wrote  to  him,  requesting  him  to  furnish  it  He 
died  without  having  done  so,  and  nothing  was  done  in  the 
matter  prior  to  the  member's  death.  Afterward  the  society 
issued  to  Josie  A.  Manning  a  certificate,  and  paid  her  the  fund 
provided  for.  The  court  says:  "  The  intention  of  the  assured 
was  to  change  the  benefit.  He  so  directed  in  writing,  and,  now, 

'  Splawn  V.  Chew,  60  Texas  532. 


OhAP.  12,  §329.]  BENEFICIARY.  261 

because  he  did  not  do  so  in  the  formal  manner  prescribed  by  the 
law  for  the  benefit  of  the  order,  it  is  asked  by  a  third  party 
whose  interest  in  the  insurance  was  liable  to  end  at  any  time 
At  the  will  of  the  assured,  that  his  intention  shall  be  defeated, 
iilthough  the  party  for  whose  benefit  the  form  was  prescribed, 
has  seen  proper  to  waive  it,  Such-a  rule  would  sacrifice  sub- 
stantial justice  to  mere  form ;  it  would  tend  to  defeat  the  benev- 
olent aim  and  purpose  of  the  organization,  and  the  desire  and 
intention  of  the  assured.  Members  of  the  order  may  be  remote 
from  their  lodge;  they  may  not  have  their  certificates  with 
them,  and,  therefore,  be  unable  to  make  the  indorsement 
thereon  as  directed,  or  to  have  it  attested  by  the  recorder  of 
their  lodge,  or  its  seal  attached  thereto.  If  appellee  chooses 
to  waive  these  formalities,  it  does  not  lie  in  the  mouth  of  a 
third  party  to  complain." 

A  member  took  a  certificate  of  membership  in  a  society, 
which,  among  other  things,  contained  the  following:  "In  ac- 
cordance with  the  provisions  and  laws  governing  said  associa- 
tion, a  sum,  not  exceeding  $2,000,  will  be  paid  by  the  associa- 
tion as  a  benefit,  upon  due  notice  of  his  death,  and  surrender 
of  this  certificate,  to  such  person  or  persons  as  he  may  by 
■entry  on  the  record  book  of  the  association,  or  on  the  face  of 
this  certificate,  direct,"  etc. 

At  the  date  of  the  issue  of  this  certificate  the  name  of  his 
wife  was  entered  on  the  record  book  of  the  society  as  the  per- 
son to  whom  the  benefit  was  to  be  ])aid  upon  his  death.  After- 
ward the  member  surrendered  this  certificate  to  the  society,  and 
procured  a  new  one  to  be  issued  ])ayable  to  his  parents. 

On  the  ground  that  the  wife  had  no  vested  interest  in  the 
original  certificate,  the  court  held  that  the  surrender  of  it  to 
the  society,  and  the  procurement  of  a  new  one  payable  to  other 
persons,  was  a  valid  change  of  beneficiaries.' 

§329.  When  the  society  will  be  deemed  to 
Avaived  defects  in  the  form  of  the  designation 
adopted  by  a  member.  The  (juestion  as  to  the  validity 
-of  a  change  made  in  the  designation  of  a  beneficiary  has,  so 
far,  been  discussed  with  reference  to  the  rights  of  the  person 
first  designated. 

Another  state  of  facts  may  arise,  and  the  conflict  of  interest 

'  Barton  v.  Relief  Ass'n,  63  N.  H.  ciation,  96  111.  309;  See  "Equitable 
535;    see  also  Swift  v.  Benefit  Asso-     Assignment"  at  section  193. 


262  BENEFICIARY.  [ClIAP.  12,  §229. 

may  be  between  the  person  in  whose  favor  the  designation  wa& 
changed,  and  the  society  itself. 

Where  the  benefit  fund  will  lapse  to  the  society  on  failure  of 
the  member  to  designate  a  beneficiary  to  receive  it,  the  officers 
of  the  society,  by  recognizing  and  acquiescing  in  a  change  of 
the  beneficiary  which  is  not  in  conformity  with  the  rules  and 
provisions  of  the  contract,  ma^^  estop  the  society  from  claim- 
ing the  benefit  fund  on  account  of  the  invalidity  of  the  change. 

A  member  of  a  mutual  benefit  society  received  a  certificate 
payable  to  his  wife,  whom  he  had  married  many  years  before. 
At  the  time  of  the  marriage  she  had  a  dau2:hter  who  afterward 
lived  with  them,  but  they  had  no  children.  After  the  death 
of  the  wife,  which  occurred  a  few  months  after  the  issuing  of 
the  certificate,  the  member  made  a  will,  by  which  he  left  to 
his  step -daughter  all  his  property.  His  property  consisted  of 
his  clothes,  a  little  furniture  and  the  insurance  in  question. 
After  the  will  was  drawn  he  caused  a  friend  to  write  a  letter 
on  the  back  of  it  to  one  of  the  principal  ofiicers  of  the  lodge, 
and  delivered  the  will  to  him.  He  alsQ  told  the  reporter  of 
the  lodge  of  the  contents  of  the  will,  and  of  his  understand- 
ing that  it  conveyed  his  insurance  to  his  step-daughter. 
After  the  death  of  the  member,  the  society  refused  to  pay 
the  step-daughter,  who  had  proved  the  will,  upon  the  ground 
that  the  member  had  not  complied  with  the  requirements  of 
an  article  of  its  constitution  providing  that,  "  in  the  event  of 
the  death  of  all  the  beneficiaries  designated  by  the  member, 
before  the  decease  of  such  member,  if  he  shall  make  no  other 
disposition  thereof,  the  benefit  shall  be  paid  to  the  heirs  of  the 
deceased  member,  and  if  no  person  shall  be  entitled  to  receive 
such  benefit,  by  the  laws  of  the  order,  it  shall  revert  to  the 
widow  and  orphan  benefit  fund."  So  far  as  appeared  the 
member  had  no  relations,  and  the  society  claimed  that  the 
death  benefit  lapsed  to  the  "widow  and  orphan  benefit  fund.'^ 
Upon  these  facts  the  court  said:  "  The  delivery  of  the  will 
to  Osborn,  the  proper  officer  of  the  lodge,  and  the  contempora- 
neous statements  made  by  the  assured  to  Boyer,  the  reporter 
of  the  lodge,  and  the  retention  of  the  will  by  said  lodge  with- 
out any  objection  to  the  form  or  manner  of  designation,  con- 
stitute a  waiver  of  any  defect  or  irregularity  in  such  designa- 
tion or  disposition.  If  the  paper  was  regarded  as  imperfect, 
it  was  the  duty  of  the  officers  of  the  lodge  to  return  it  to  the 
assured  with  notice  of  the  defect."  ' 

'  Kepler  v.  Supreme    Lodge,  K. 
of   H.,  45  Hun  (N.  Y.)  274. 


Chap.  1l>,  §231.]  beneficiary.  263 

§  330.  Inoperative  cliaiigre  of  beneficiary  does 
not  revoke  original  designation.  Where  a  meiiiber 
has,  in  conformity  with  the  law  of  tlie  society,  des- 
iornated  the  person  to  whom  the  fund  shall,  at  his  death,  be 
paid,  this  original  designation  will  remain  in  force,  unless  a 
valid  and  legal  change  is  made  in  the  designation  of  benefi- 
ciaries. An  attempted  change  which  is,  for  any  reason,  inop- 
erative, invalid  or  illegal,  does  not  operate  as  a  revocation  of 
the  original  designation. 

The  Supreme  Court  of  Massachusetts,  in  Elsey  v.  Odd  Fel- 
lows'Mutual  Relief  Association  et  al.  Mass.;  T  jST.  E.  Eep. 
8M,  says:  "As  the  assignment  to  the  mother  was  invalid,  we 
think  the  original  designation  to  the  wife  remained  in  force. 
We  can  see  no  reason  to  suppose  that  the  later  assignment 
was  intended  to  operate  as  a  revocation  of  the  designation  to 
the  wife,  unless  it  took  effect  as  a  designation  to  the  mother. 
The  scheme  of  the  by-laws  is  that  the  beneliciary  shall  be 
designated  by  the  member  in  his  application  for  membership, 
and  the  benefit  shall  be  paid  to  such  beneficiary,  unless  there  is 
a  subsequent  legal  assignment.  They  make  no  provision  for 
revoking  a  designation  except  by  a  legal  assignment  to  some 
other  person,  assented  to  by  the  directors.  We  cannot  presume 
that  the  deceased  member  intended  his  assignment  to  operate 
as  a  revocation  of  the  previous  designation  in  the  event  of  its 
invalidity  as  an  assignment  to  his  mother,  and  there  is  no  assent 
of  the  directors  to  any  such  revocation." 

§  331.  Frandnlent  cliang-e  of  beneficiary.  When 
the  beneficiary  has  no  vested  right  in  the  benefit  fund,  a 
change  of  beneficiary  works  no  fi-aud  upon  the  original  bene- 
ficiary, or  those  claiming  through  or  under  him. 

One  who  has  an  insurable  interest  in  the  life  of  the  member 
has  a  right  to  use  all  the  persuasive  arts  at  his  command  to 
induce  the  member  to  make  him  the  beneficiary  of  his  certi- 
ficate.* 

A  member  of  a  mutual  benefit  society,  knowing  that  the 
beneficiary  named  in  his  certificate  is  greatly  indebted,  may, 
in  accordance  with  the  laws  and  regulations  of  the  society, 
change  the  beneficiary  entirely,  or  make  the  fund  payable  to  a 
person  in  trust  for  the  original  beneficiary,  and  such  change 
will  constitute  no  fraud  upon  the  original  beneficiary  or  his 
creditors.* 

'  Pingree  v.  Jones,  80  111.  181.  •  Schillinger  v.  Boes,  etc  ,   Ky.  3 

S.  AV.  Rep.  427. 


264  BENEFICIARY.  [ClIAP.  12,  §232. 


Designation  of  Beneficiary.    Part  III. 


CONSTKUCTION    OF    DESIGNATION,    ETC. 


Sec.  232. 
Sec.  235. 


Provisions  of  charter — charter  beneficiaries. 


Sec  236.    "  As  designated  in  last  will." 
Sec  237.    "Devisees." 

[  "  Widows." 

Sec.  241.    Adultery  of  wife  or  widow,  effect  upon  right  to  fund. 
Sec.  242.    Benefit  fund  payable  to  wife  "  for  the  benefit  of  herself  and 
the  children  of  said  member." 


Sec.  238 
Sec.  240 


Sec  244:  ("Wife  and  children." 

iEc24£fcMld-grandchild. 

Sec.  246.     Children  born  after  issuing  of  certificate  of  membership. 

SEc256:f"Hei^^'""^^g^^^^^'-«'"«t^- 

Sec.  2.57.     In  what  proportion  heirs  take  the  fund. 

Sec  258.    "  Legal  representatives." 

Sec  259.    Meaning  of  the  term  "orphans,"  as  used  by  societies. 

Sec   261   \  ^^^^  the  member  becomes  a  beneficiary  by  inheritance. 

Sec   264  ("  ^^^^  estate  of  the  beneficiary  does  not  take  the  fund. 

Sec   266  f  ^^^^  beneficiaries  take  equally. 

Sec.  266a.  "Survivor." 

Sec  267.    Agreement    between    member    and    beneficiary  as  to    the 

fund. 
Sec  268.     "  Guardian  "  of  member. 

Sec.  269.    Reformation  of  certificate — inserting  name  of  beneficiarj\ 
Sec.  270.     Incomplete  designation. 
Sec   271   ) 
Sec   2T>  f  Where  no  designation  is  made. 

Sec.  232.  Provisions  of  charter — charter  bene- 
ficiaries. It  is  customary  for  mutual  beneiit  societies  to 
provide  in  their  charters,  by-laws,  or  certificates  of  member- 
ship, how  the  benefit  fund  shall  be  disposed  of,  in  case  no 
designation  shall  be  made  by  the  member,  or  in  case  the  desig- 


OhAP.  12,  §233.]  BENEFICIARY.  265 

nated  beneficiary  shall  die,  or  be  from  any  cause  incapable  of 
taking  the  fund.  These  provisions  are  a  part  of  the  contract 
of  insurance,  and  in  construing  the  meaning  of  a  designation 
made  by  a  member,  or  in  seeking  to  determine  who  is  entitled 
to  the  benefit  fund,  they  must  often  be  looked  to  as  an  import- 
ant element  of  the  question. 

The  laws  adopted  by  a  mutual  benefit  society  determine  the 
rights  of  the  members  and  the  society;  and  a  benefit  fund 
which  is  to  be  paid  to  the  family  or  heirs  of  a  deceased  mem- 
ber, unless  otherwise  directed  by  such  member  in  his  life-time, 
will,  on  failure  of  the  member  to  give  such  direction,  be  con- 
trolled by  such  laws. 

Where,  by  the  laws  of  a  society,  the  benefit  fund  is  to  be 
paid  "  to  the  widow,  children,  mother,  sister,  father  or  brother 
•of  a  deceased  member,  and  in  the  order  named,  if  not  other- 
wise directed  by  the  member  previous  to  his  death,"  the  rela- 
tives will  take  the  fund  in  the  order  named,  unless  the  mem- 
ber in  his  life-time  executed  such  power  of  direction,  thus 
changing  the  order  of  payment.' 

Where  the  charter  of  a  mutual  benefit  society  provides 
that  the  benefit  fund  shall,  upon  the  death  of  a  member,  be 
paid  to  his  widow  and  children,  they  are  entitled  to  the  fund, 
although  another  person  is  named  in  the  certificate  of  mem- 
bership as  the  beneficiary,  and  has  paid  all  the  assessments 
levied  upon  the  member.  The  certificate  must,  in  such  a  case, 
be  construed  in  connection  with  the  charter  as  a  contract  to 
pay  to  the  widow  and  children  of  the  member  the  amount  of 
the  insurance.  If,  for  instance,  a  certificate  in  such  a  society 
is  made  payable  to  a  creditor  of  the  member,  it  is  not  void, 
but,  the  designation  in  the  certificate  alone  being  void,  there 
remains  a  valid  and  subsisting  contract  of  insurance,  under  the 
terms  of  the  charter,  in  favor  of  the  widow  and  children  of  the 
member.^ 

§  233.  Same  subject  continued.  By  the  provis- 
ions of  the  by-laws  of  an  association,  a  member  in  good  stand- 
ing might  surrender  his  certiKcate  and  have  a  new  one  issued, 
payable  to  such  beneficiaries  dependent  upon  him,  as  he  might 
direct,  and  in  the  event  of  the  death  of  the  beneficiary  named, 

'Arthur  v.  Odd  Fellow  Ben.  Asso-  Ben.  Society,  8  Kv.   L.  Rep.    (Sup'r 

ciation,  29  O.  St.  557.  (^t.)  520;  See  Rindge  v.   N.   E.    Mu- 

"  Ky.  Gransrers' Mut.  Ben.  Soc.   v.  tual   Aid   Society,"  Mass.  15    N.    E. 

McGregor,  7  Ky.  L.  Rep.  (Sup'r  Ct.)  Reji.  G28;  See  "Recovery  of  assess- 

550;  Gibson  V.  Ky.   Granger's   Mut.  nients." 


266  BENEFICIARY.  [CuAP.  12,  §234:. 

and  no  other  disposition  being  made,  tlie  benelit  was  to  go  to 
the  dependent  heirs  of  the  deceased  member. 

An  insured  member  died.  He  left  a  will  bequeathing  the 
benefit  fund  to  a  person  to  whom  he  was  engaged  to  be  mar- 
ried, but  to  whose  support  he"  had  contributed  nothing,  and 
who  was  not  dependent  npon  him.  He  died  without  marry- 
ing this  person,  and  left  his  mother,  who  was  dependent  upon 
him,  as  his  next  of  kin.  It  was  held,  under  these  facts,  that  the 
disposal  of  the  fund  bv  will  being  invalid,  the  mother  was 
entitled  to  it.' 

The  object  of  a  society  was  "  to  establish  a  widows'  and 
orphans'  fund  "  for  the  payment  of  a  certain  sum,  on  the  death 
of  a  member,  "  to  his  family  and  those  dependent  upon  him, 
as  he  may  direct."  A  by-law  provided  that  in  case  a  member 
fails  to  direct,  "by  will,  entry  or  benelit  certificate,"  who  shall 
receive  such  benefit,  "the  council  shall  cause  the  same  to  be 
paid  to  the  person  or  persons  entitled  thereto,"  etc.  A  mem- 
ber designated  his  children  as  beneficiaries.  They  died  a  short 
time  before  the  father,  and  he  gave  no  other  direction,  and 
left  no  children  or  other  persons  dependent  upon  him  for  sup- 
port, except  his  widow;  and  the  court  held  that  the  widow  was 
entitled  to  the  benefit  fund.'' 

Where  the  charter  of  a  mutual  benefit  society  provides  for 
the  payment  to  the  member's  family  or  appointee,  of  a  certain 
sum  of  money  upon  the  member's  death,  and  that,  "in  case  no 
direction  is  made  by  a  brother,  the  same  shall  be  paid  to  the 
person  or  persons  entitled  thereto,"  upon  the  death  of  a  mem- 
ber, without  having  named  a  beneficiary,  the  benefits  are  pay- 
able to  the  wife  and  children,  and  not  to  the  administrator,  of 
the  deceased  member.^ 

§334.  Charter  beneficiaries  continued.  A  mem- 
ber was,  at  the  time  of  his  death,  in  good  standing  in  an  associ- 
ation, the  object  of  which  was,  as  declared  by  its  charter,"  to  pro- 
vide and  maintain  a  fund  for  the  benefit  of  the  widow,  orphan, 
heir,  assignee  or  legatee  of  a  deceased  member."  By  a  provis- 
ion of  one  of  the  by-laws,  if  a  deceased  member  had  no  legal 
representatives,  the  fund  should  become  the  property  of  the 
association.     He  had  named  his  first  wife,  A.  R.  as  the  bene- 

'  Supreme  Council  v.  Perry  et  nl,  '  Fenn  v.  Lewis,  81  Mo.  259  ;affirm- 

187  Mass.  580.  ing  10  Mo.  App.  478. 

•^  Ballou  V.  Gile,  Adm'r.,  50  Wis. 
614. 


Chap.  12,  §235.]  beneficiary.  26T 

ticiary  of  his  certilicate,  and  she  died.  He  married  again,  and 
died  intestate  without  children,  leaving  his  second  wife.  He 
never  made  another  designation  of  a  beneficiary,  after  he  took 
out  his  certificate. 

Three  separate  claims  were  made  to  the  fund;  first,  by  the 
representatives  of  the  first  wife;  second,  by  the  representatives 
of  the  husband;  third,  by  the  surviving  widow.  Whereupon 
the  association  filed  a  bill  of  interpleader,  making  these  partie 
defendants  that  they  might  establish  their  several  claims  to 
the  fund.  The  court  held  that  the  repi-esentatives  of  the  first 
wife  were  not  entitled  to  the  fund.  And  it  was  held 
that  the  term  legal  rejyresentatives  m  the  by-law,  providing 
that  "if  a  member  has  no  legal  representatives,  such  sum  of 
money  as  they  would  have  been  entitled  to,  shall  become  the 
property  of  the  association,"  is  to  be  taken  as  meaning  those 
who  are  legal  representatives  in  the  contemplation  of  the 
charter  and  by-laws,  to  wit;  the  persons  named,  "  the  widow, 
orphans,  heir  or  legatee." 

The  court  says:  "The  fund  is  to  go  to  some  one  of  these 
parties.  They  are  mentioned  disjunctively;  the  money  is  to 
be  paid  to  the  widow,  or  the  orphans,  or  the  heir,  or  the 
assignee  or  legatee.  Now,  that  means  one  of  two  things, 
either  that  it  shall  go  to  some  one  of  these,  to  be  selected  by 
some  authority,  or  else  that  they  are  to  have  precedence  in  the 
order  in  which  they  are  named.  But  there  is  no  authority 
provided  for,  or  indicated  in  either  the  charter  or  the  by-laws, 
by  whom  any  one  of  these  beneficiaries  shall  be  selected;  and, 
therefore,  our  conclusion  is  that  the  order  in  which  they  are 
named  is  tlie  order  in  which  they  are  to  benefit  by  this  fund; 
first  the  widow;  if  there  is  no  widow,  then  theor])hans;  if  there 
is  no  orphan,  then  the  heir,  etc.  In  this  case  the  question  is 
between  the  widow  and  the  personal  representatives.  The 
latter  are  excluded  entirely  by  our  construction  of  the 
by-laws,  and  therefore,  the  decree  will  be  that  the  widow  shall 
take  the  fund."  ' 

§  335.     Charter      beneficiaries      oontiiiued.     In 

McClure  V.  Johnson,  56  Iowa,  620,  the  benefit  fund  was  made 
payable  to  the  "  wife,  husband,  children,  mother,  sister,  father 
or  brother  of  such  deceased  member,  and  in  the  order  above 
named,"  by  the  provisions  of  a  by-law  of  tlie   society,  and 

'  Relief  Associatio-j   v.  McAuley, 
2  Mackey  D.  C  70. 


268  BENEFICIARY.  [ClIAP.   12,  §236. 

there  was  no  provision  of  the  contract  of  insurance,  authoriz- 
ing any  other  disposition  of  the  fund. 

A  member  left  a  will  by  which  he  directed  that  the  fund 
should  be  paid  to  a  creditor,  but  the  court  held  that  he  had  no 
right  to  change  the  beneiiciary,  and  that,  under  this  by-law, 
his  widow  was  entitled  to  the  fund. 

Where  the  charter  of  a  jnutuai  benefit  society  provides  that 
the  fund  due  upon  the  death  of  a  member  shall  be  paid  to  his 
widow  and  children,  and  only  gives  the  member  the  power  to 
designate  by  will  in  what  proportion  it  shall  be  divided 
between  them,  there  can  be  no  assignment  of  a  certificate  or 
change  in  the  beneficiary  which  will  divest  the  widow  and 
children  of  their  rights,' 

The  charter  of  a  society  provided :  "  Upon  the  decease  of  any 
member  of  this  association,  the  fund  to  which  his  family  is 
entitled  shall  be  paid  as  may  be  designated  in  the  application 
for  membership;  this  being  changed  by  death,  or  otherwise 
impossible,  it  shall  go — first — to  the  widow  and  infant  chil- 
dren," etc. 

A  member  designated,  as  his  beneficiary,  his  brother,  who 
afterward  died  on  March  7,  1880.  The  member  died  May  26, 
1880,  intestate  and  childless.  His  widow,  and  not  his  admin- 
istrator, was  entitled  to  the  benefit  fund.'^ 

§236.  "  As  designated  ill  last  will."  The  charter 
of  a  mutual  benefit  society  provided  in  its  sixth  section  that, 
upon  the  decease  of  any  member  of  the  association,  "  the  fund  to 
which  his  family  is  entitled  shall  be  paid  as  may  be  designated 
in  the  application  for  membership.  This  being  changed 
by  death,  or  otherwise  impossible,  it  shall  go  first  to  the 
widow  and  infant  children,"  and  afterward  in  the  order 
named.  A  member  directed  in  his  application  that  the  benefit 
should  be  paid  at  his  death  as  he  might  designate  in  his  will. 
He  died  intestate,  leaving  a  widow,  but  no  infant  children. 

The  court  held  that  the  widow  was  entitled  to  the  fund,  and, 
in  so  deciding,  says: 

"  Appellants  contend  that  this  section  (above  quoted)  applies 
only  where  a  designation  is  made,  and  subsequent  events 
render  it  impossible  of  fulfillment.  But  we  think  it  has  a 
broader  and  more  comprehensive  meaning,  and  that  it  applies 

'  Ky.  Grangers'  Mut.  Ben,  Soc.  v.  '^  Van  Bibber's  Adm'r.  v.  Van 
Howe,  9  Ky.  Law  Rep.  (Supr.  Ct.)  Bibber,  82  Ky.,  347,  affirming  5  Ky., 
198.  Law.  Rep.,  182. 


Chap.  12,  §286.]  beneficiary.  260 

as  well  where,  bj  reason  of  the  failure  of  the  insured  to  make 
any  designation  at  all,  it  becomes  impossible  to  pay  according 
to  his  direction,  as  in  case  of  the  death  of  a  designated  benefi- 
ciary;  for,  according  to  what  seems  to  us  the  true  construction 
of  the  language  used,  it  is  only  in  those  cases  where,  pursuant 
to  the  charter,  the  insured  has  expressly  directed  otherwise, 
that  the  fund  is  not  payable  as  pointed  out  by  the  terms  of  the 
sixth  section."  ' 

The  Covenant  Mutual  Benefit  Association  issued  a  certificate 
of  membership,  and  agreed  therein  that,  on  the  death  of  the 
member  in  good  standing,  it  would  cause  an  assessment  to  be 
made  upon  its  members,  and  would  pay  the  proceeds  of  such 
assessment,  not  exceeding  $2,500.00,  "  as  a  benefit  to  his 
devisees,  as  provided  in  his  last  will  and  testament,  or  in  the 
event  of  their  prior  death,  to  the  legal  heirs  or  devisees  of  the 
holders  of  this  certificate."  The  member  died  in  good  stand- 
ing and  intestate. 

Judge  Dyer  (U.  S.  Circuit  Court,  E.  D.  Wisconsin),  in  con- 
struing this  contract,  said:  "  The  insured  might  die  intestate. 
It  could  not  have  been  in  contemplation  of  the  parties  that,  in 
that  event,  there  was  to  be  no  beneficiary  entitled  to  sue  upon 
the  contract.  The  certificate,  fairly  and  reasonably  construed, 
means,  we  think,  that  if  the  insured  should  choose  to  make  a 
last  will  in  which  devisees  should  be  named,  then  such 
devisees  were  to  become  the  beneficiaries  entitled  to  receive 
and  recover  the  sum  collected  by  assessment  on  account  of  the 
certificate.  But  no  obligation  was  imposed  upon  the  insured 
to  make  a  last  will.  He  might,  if  he  chose,  leave  his  estate 
to  be  divided  among  legal  heirs  as  the  law  should  direct  its 
division,  and,  in  that  event,  as  no  devisees  would  exist,  the 
benefits  of  the  certificate  would  accrue  to  the  heirs.  In  other 
words,  the  effect  of  the  contract  is  that  if  the  insured  has  made 
no  will,  and  if,  therefore,  no  devisees  are  in  existence,  his  legal 
heirs  shall  become  the  beneficiaries  entitled  to  enforce  ])ayment 
in  a  suit  upon  the  certificate.  This  view  of  the  rights  of  the 
parties  accords  wnth  the  sense  and  meaning  of  the  contract."'^ 

A  mutual  benefit  society  issued  a  certificate  of  membership 
in  which  it  agreed  to  pay,  or  cause  to  be  paid  "  as  a  benefft  to 
the  member's  devisees,  as  provided  in  his  last  will  and  testa- 
ment, or  in  the  event  of  their  prior  deatli,  to  the  legal  heir  or 
devisees  of  the  certificate  holder"  the  amount  derived  from  an 

'  Whitehurst  v.  Whitehurst,  Va.,  ''  Smith  et  al.  v.  Covenant,  etc., 
1  S.  E.  Rep.,  801.  Ass'n.,  24  Fed.  Rep.,  685. 


270  BENEFICIARY.  [ChAP.  12,  §238. 

assessment  upon  its  members.     In   construing  this  contract 
the  court  says: 

"  The  substantial  promise  was  to  pay  to  devisees,  if  there 
were  devisees  to  take,  and,  if  not,  then  to  pay  to  lieirs.  We 
think  this  the  fair  and  reasonable  construction  of  the  agree- 
iuent,  wliich,  in  view  of  the  purpose  of  the  association,  may 
well  be  adopted.'" 

§  337.  Devisees.  A  certificate  of  insurance  was  issued 
by  a  society  organized  under  the  laws  of  Illinois  for  the  purpose 
of  securing  "  pecuniary  benefits  to  widows,  orphans,  heirs,  rel- 
atives and  devisees  of  deceased  members,"  and  was  made 
payable  "  to  the  devisees  of  Philip  II.  Worley."  Worley  died 
intestate,  and  suit  was  brought  on  the  certificate  by  the  admin- 
istrator of  Worley's  estate,  in  the  U.  S.  Circuit  Court  for  Dis- 
trict of  Iowa.  So  far  as  appears  from  the  reported  case,  no 
provision  was  made  by  tlie  society,  designating  a  beneficiary 
in  case  the  member  should  fail  to  make  a  designation — except 
as  the  express  purpose  of  the  law  above  quoted  might  be  con- 
strued into  such  a  provision. 

Judges  McCrary  and  Love  held  that  the  certificate  was  not 
a  part  of  the  assets  of  the  estate,  and  not  recoverable  as  such 
by  his  administrator.  Expressions  in  the  opinion  of  the  court 
indicate  that,  in  the  view  taken  of  the  case,  no  recovery  could 
be  had  upon  the  certificate.  It  was  there  said  that  neither  the 
decedant  nor  the  defendant  corporation  intended  by  their  con- 
tract to  provide  for  the  widows,  orphans,  heirs  or  creditors  of 
the  decedent,  but  only  for  his  devisees,  and,  as  there  were  no 
devisees,  there  was  no  beneficiary  in  existence  who  could  enforce 
the  contract — that,  as  in  no  contingency,  was  the  insurance  to 
be  paid  to  any  other  persons  than  devisees,  the  expression  of  one 
thing  excludes  other  and  different  things;  that  the  designation 
of  devisees  in  the  contract  excluded  the  other  classes  —  the 
widow,  orphans,  heirs  and  creditors.'- 

§  338.  Widow.  The  by-laws  of  a  society  provide  that 
"  the  sum  due  upon  the  policy  of  a  deceased  member  of  the 
company,  shall  be  paid  to  the  widow  *  *  *  -5^  for  the 
use  of  herself  and  the  dependent  children  of  the  deceased." 
They  declare  the  intention  to  be,  to  keep  from  want  the  fami- 
lies of  its  members,  and  to  keep  them  from  becoming  a  burden 
to  the  society;  and  they  provide  that,  "  in  no  case  shall  a  mem- 

'  Covenant  Mut.  Ben.  Ass'n.  v.  "^  "Worley  Adm'r  v.  N.W.  Masonic 
Sears,  114  111.,  108.  Aid  Ass'n,  10  Fed.  Rep.  227. 


Chap.  12,  §239.]  beneficiary.  •        271 

ber  dispose  of  his  policy  by  will  or  otherwise,  so  as  to  deprive 
his  widow  or  his  dependent  children  of  its  benefits." 

A  member  gave,  by  will,  $1,000  of  his  policy  to  his  wife, 
and  the  remainder,  about  $3,000,  to  his  infant  son,  for  his  edu- 
cation, etc.  The  widow,  after  the  death  of  the  member,  dis- 
sented from  the  will,  and  claimed,  as  the  proper  construction 
of  the  policy,  that  the  sum  due  upon  it  must  be  equally  divided 
between  herself  and  the  child,  share  and  share  alike;  that  the 
testator  had  no  power  otherwise  to  dispose  of  it. 

But  the  court  held  otherwise,  and  said:  "Where  the  mem- 
ber leaves  a  wife  and  dependent  children,  the  money  must  go 
to  their  support,  according  to  their  necessities,  so  as  to  keep 
them  from  being  a  burden  to  the  brotherhood;  and  as  one 
may  be  more  dependent  than  another,  there  must  be  a  reason- 
able discretion  in  the  member  to  make  such  discriminations 
as  will  effect  the  main  purpose  of  the  policy;  and  the  division 
need  not  be  made  share  and  share  alike.  This  construction  is 
strengthened  by  the  fact,  that  when  the  member  leaves  no 
Avidow,  and  his  family  is  broken  up,  then  the  money  is  directed 
to  be  divided  out  among  his  children  or  other  relations, 
■*  share  and  share  alike,'  but  there  is  no  such  direction,  if  there 
is  a  widow.  We  do  not  see  any  unreasonable  exercise  of  this 
discretion  on  the  part  of  the  testator."  (It  was  admitted  that 
the  widow  had  a  separate  estate  of  $2,000  worth  of  land)  "  The 
widow  was  otherwise  provided  for  to  an  amount  which,  if  added 
to  the  $1,000  given  in  the  will,  would  make  her  more  than 
•equal  with  the  child;  and  the  child  has  to  be  educated.  The 
widow  having  already  received  the  $1,000  left  in  the  will,  she 
is  not  entitled  to  any  more.'" 

§  339.  "Widow"  continued.  One  Bolton,  in  1847, 
deserted  his  wife,  and  in  1862,  so  far  as  the  forms  of  law  are 
concerned,  married  another  woman,  with  whom  he  lived  and 
coliabited,  until  he  died  in  June,  1879.  In  October,  1S77, 
Bolton  became  a  member  of  a  mutual  benefit  society,  and  in 
August,  1878,  he  became  a  member  of  another  such  society,  in 
each  of  which  he  continued  in  good  standing  until  liis  decease. 
By  the  terms  of  his  membership  in  these  S()cieties  the  benefit 
fund  was  "  payable  to  the  widow  of  the  deceased  member." 

After  the  death  of  the  member,  the  womaTi  with  whom  he 
went  through  the  forms  of  marriage  in  1SG2,  collected  tlie 
benefit  fund  in  each  society,  and  the  wife,  whom   he  had   de- 

'  Roberts    v.    Roberts,  E.\'r  etc. 
64  N.  C.  (595. 


272  BENEFICIARY.  [Chap.  12,  §240. 

serted,  afterward  brought  an  action  to  recover  from  her  the 
sums  received  by  her  as  benefits  from  the  societies. 

The  Supreme  Court  of  Maine,  held,  that,  the  contract  being 
in  writing  and  unambiguous,  and  being  in  terms  payable  to  the 
widow,  the  legal  widow  was  entitled  to  the  benefit  funds;  and 
that  no  evidence  dehors  the  written  contract,  was  admissible  to 
vary  its  construction  and  show  that  the  woman  with  whom 
the  deceased  member  went  through  the  form  of  marriage,  and 
cohabited,  was  intended. i  The  authorities  cited  by  the  court 
relate  to  testamentary  devises,  and,  in  explanation  of  that  fact, 
the  court  says:  "  But  even  if  this  rule  of  construction  govern- 
ing wills  be  different  from  that  of  other  instruments  in 
respect  to  the  question  under  examination,  it  is  a  sulhcient 
answer  that  a  contract  of  life  insurance  like  those  in  question, 
wdiile  it  is  not  a  testament,  is  in  the  nature  of  a  testament; 
and,  in  construing  it,  the  courts  should  treat  it,  so  far  as  pos- 
sible, as  a  will.'' 

§  340.  "Widow  "  continued.  On  the  5th  of  July,. 
1870,  the  Locomotive  Engineer  Mutual  Life  Insurance  Asso- 
ciation issued  to  H.  M.  Case  a  certiiicate  of  membership.  At 
the  foot  thereof,  and  underneath  .the  signature,  appeared  the- 
following:  "All  payments  or  benelits  that  may  accrue  or  be- 
come due  to  the  heirs  of  the  person  insured  by  virtue  of  this 
policy  will  be  payable  to  Mrs.  H.  M.  Case  or  lawful  heirs."" 
At  the  time  this  certiiicate  was  issued  to  H.  M.  Case  he  had  a 
wife  living  by  the  name  of  Amelia  M.  Case,  and  a  daughter 
by  the  name  of  Inez  H.  Case.  His  wife,  Amelia  M.,  died 
Sept.  12,  1878,  and  subsequently,  and  on  the  3d  day  of  Feb- 
ruary, 1882,  he  was  again  married.  Subsequently,  and  on 
May  29,  1885,  he  died,  leaving  Emma  (his  second  wife),  his 
widow,  and  Inez  H.,  his  only  child  and  heir-at-law,  surviving 
him.  The  daughter  sued  the  society  for  the  beneiit  fund.  The 
society  paid  into  court  the  sum  of  $2,922.55  as  the  amount  of 
benefits  due  under  the  certificate,  and  the  widow,  Emma,  was 
made  defendant. 

The  court  says:      "  The  question  presented  is  whether  the 

'  Bolton  V.   Bolton,   73   Me.  299.  Vaudry,  5  Ves.  534,  2  Jarm.  Wills, 

Citing  Dorin  V.  Dorin ;    Eng.   &    Ir.  Ch.  31;  1   Greenl.  Ev.   section   278. 

Ap.  Cas.5(i8,  Hill  v.  Crook,  L.  R.  6  See  Chap.  XI,  §  181.     See  also  §417. 
n.  L.  Cas.  2fi8;   Gardner  v.  Heyer,  2        '^  See  Masonic  Ins.  Co.  v.  Miller, 

Paige  Ch.  10, 13.     Cromer  v.   Pink-  13  Bush  (Ky.)  489;    Washington  En- 

ney,  3  Paige  Ch.  461,  475.    Collins  v.  dow.  Ass'n  v.  Wood.  4  Mackey  D.  C. 

Hoxie,  9  Paige,  Ch.  81,  88;    Hare  v.  19;    McDermott  v.  Life  Association^ 

Lloyd,  1  T,  &  R.  693 ;    Cartwright  v.  24  Mo.  App.  73. 


Chap.  12,  §240.]  beneficiary.  273 

plaintiff  or  the  defendant  is  entitled  to  the  money  so  paid  into 
court.  There  was  no  new  desio-nation  of  a  beneficiary  after 
the  certilicate  was  issned,  or  after  the  deatli  of  the  lirst  wife. 
That  which  we  have  quoted  at  the  foot  of  the  certificate,  was 
the  designation  made  at  that  time.  It  was  "  Mrs.  H.  M.  Case, 
or  lawful  heirs,"  meaning  Mrs.  H.  M.  Case,  or  in  case  she  was 
unable  to  take  by  reason  of  death  or  other  disability,  his  lafwul 
heirs  should  become  the  beneficiary.  It  is  now  contended  that 
Mrs.  H.  M.  Case  was  the  name  of  the  defendant,  his  widow, 
and  that,  consequently,  she  is  the  beneficiary  named  in  the  cer- 
tificate. We  cannot  assume  that  he  then  contemplated  the 
death  of  his  wife,  and  his  subsequent  marriage  to  the  defendant 
in  this  action.  If  Amelia  M.  Case  was  the  person  intended 
by  the  designation  upon  the  certificate,  then,  on  her  death,  the 
designation  lapsed  as  to  her,  and  his  lawful  heir,  which  was 
Inez  II.  Case,  became  the  person  designated  as  the  beneficiary, 
and,  inasmuch  as  there  has  been  no  subsequent  designation  of 
any  other  person,  it  follows  that  she  is  entitled  to  the  monev. 
It  is  urged  that,  because  the  words  "  Mrs.  IT.  M.  Case  "  were 
used,  it  was  intended  that  the  certificate  should  mean  one  per- 
son at  one  time,  and  another  at  another  time;  that  it  meant 
Amelia  M.  at  the  time  it  was  issued,  but  that  it  meant  the 
defendant  at  the  time  of  his  death.  Such,  however,  does  not 
appear  to  us  to  have  been  the  meaning  of  the  instrument."  ' 

By  the  provisions  of  a  by-law  of  a  mutual  benefit  society, 
at  the  death  of  a  member  the  sum  of  twenty-five  dollars  was 
to  be  paid  to  his  widow  or  relatives,  to  provide  for  his  decent 
interment.  Tlie  widow  of  a  deceased  member,  who  at  the 
time  of  his  death,  and  for  years  previously,  had  not  been  living 
with  him,  and  had  incurred  no  expense  towards  his  interment, 
brought  an  action  to  recover  this  stipulated  sum,  and  was  met 
by  an  offer  of  the  society  to  show  that  the  amount  had  already 
been  paid  to  decedent's  son-in-law,  at  whose  house  he  diedf, 
and  who  bore  all  the  expenses  of  his  funeral. 

The  court  held  that  the  offer  should  have  been  received,  and 
that  being  separated  from  her  husband,  in  pursuance  of  a 
mutual  understanding,  and  not  by  reason  of  coersion  or  ill- 
treatment,  living  apart  from  him  at  the  time  of  his  death,  and 
having  borne  no  part  of  the  funeral  expenses,  the  widow  was 
not  entitled  to  the  bounty  of  the  society.'^ 

•  Day,  Guardian  v.  Case,  43  Hun  "  Berlin  Beneficial  Society  v. 
(N.  Y)  179.  March.  82  Pa.  St.  IGG. 


274  BENEFiciAKY.  [Cpiap.  12,  §242. 

§  341.  Adultery  of  wife  or  widow  does  not 
effect  rig'lit  to  fund.  Where  a  certificate  is  made  pay- 
able to  the  widow  of  a  deceased  member,  she  does  not  forfeit 
her  right  to  the  beneiit  fund  by  living  in  adultery  with  a 
strange  man.  The  analogy  of  a  statute  respecting  the  forfei- 
ture of  dower  for  the  misconduct  of  the  wife,  cannot  be  applied 
to  a  case  of  this  nature. 

The  widow  is  entitled  to  the  fund  by  contract,  not  by  reason 
of  the  relation  of  husband  and  wife.' 

§  343.  Benefit  fund  payable  to  wife  "for  the 
benefit  of  herself  and  the  children  of  said  mem- 
ber." A  certificate  of  membership  in  a  mutual  benefit 
society,  the  purpose  of  which  is  to  pay  death  benefits  to  the  wid- 
ows and  orphans  of  deceased  members,  and  to  other  persons 
shown  to  be  dependent  on  members,  was  made  payable  to  the 
member's  widow  "  for  the  benefit  of  herself  and  the  children 
of  said  member." 

When  the  certificate  was  issued,  the  member  had  two  child- 
ren by  a  former  wife;  and  at  his  death  he  left  them,  and 
a  child  by  his  second  wife  who  also  survived  him.  At  his 
death  his  eldest  child  had  been  married,  and  had  lived  at  her 
own  home  for  four  years.    Upon  these  facts,  the  court  says: 

"  In  the  first  place  it  is  plain  that  (the  widow)  is  not  entitled 
to  hold  this  money  absolutely.  Even  under  similar  language 
in  a  will,  the  children  would  have  a  right  which  they  could 
enforce  in  a  court  of  equity.'  There  is  nothing  to  show 
that  it  was  intended  that  the  sums  to  be  devoted  to  the  benefit 
of  the  children  should  be,  in  the  first  instance,  determined 
bv  her  in  her  discretion,  subject  to  accountability.  There 
are  no  words  saying  that  it  shall  be  at  her  disposal  for 
their  benefit,  or  that  she  is  to  maintain  or  support  them.  In 
the  purposes  of  the  (society),  children  are  placed  on  an 
equality  with  widows.  There  is  nothing  showing  any  inten- 
tion to  have  a  permanent  or  continued  trust.  The  words 
of  the  certificate  are  simple.  She  is  to  take  the  money  '  for 
the  benefit  of  herself  and  the  children.'  In  many  of  the 
cases  under  wills,  there  was  something  to  show  some  dis- 
cretion reposed  in  the  primary  donee,  or  some  duty  to  support, 

'  Shamrock  Benevolent  Society  v.  100  IMass.  340 ;  Raikes  v.    Ward,    I 

Drum,  1  Mo.  App.  320.  Hare  445 ;  I?i  re    Harris,    7    Exch. 

-  Procter  v.  Procter,  141  Mass.  165 ;  344. 
6  N.  E.  Rep.  849;  Loring  v.   Loring, 


Chap.  12,  §243.]  beneficiary.  275 

or  some  power  of  disposal ;  but  here  there  is  nothing  of  the 
kind.  Several  of  the  cases  under  wills  tend  stronofly  to  show 
that  under  language  like  this  the  widow  and  the  children  would 
be  entitled  to  share  equally.' 

In  the  present  case,  in  view  of  the  circumstances,  and  of 
the  bold  language  used  in  the  certilicate,  we  cannot  go  behind 
the  plain  words,  and  are  of  opinion  that  (the  widow)  and  three 
children  are  each  entitled  to  one-fourth  part  of  the  money. 
The  circumstance  that  (one  of  the  daughters)  was  married,  and 
had  left  her  father's  house,  does  not  cut  her  off.  It  would 
not  necessarily  do  so  under  a  devise.  Under  this  certificate, 
her  rights  do  not  at  all  depend  upon  the  question  whether  she 
was  forisfamilated  or  not."* 

§  343.  "  Wife  and  children,"  etc.  A  policy  was 
taken  out  by  B,  "  for  the  use  of  his  wife  Sarah  and  children," 
and  the  policy  further  provided  that  in  case  Sarah,  the  wife, 
should  die  before  her  husband,  the  amount  of  the  insurance 
should  be  payable  to  "  their  children."  The  wife  died  leaving 
her  husband  and  a  child  surviving;  B,  the  assured,  married 
again,  and  of  this  subsequent  marriage,  one  child  was  born;  it 
was  held  that  the  child  of  the  assured,  by  his  wife  Sarah,  was 
entitled  to  the  whole  insurance.^ 

A  member  of  a  society  took  out  a  policy  of  insurance  pro- 
viding that  the  proceeds  should  "  be  paid  to  his  wife,  Maglien 
Koehler,  and  children."  The  member  had  children  by  a 
former  wife;  and  one  child  by  his  wife  Maglien,  and  she  had 
one  child  by  a  former  husband.  The  question  arose  as  to  which 
of  all  these  children  were  entitled  to  participate  in  the  benelits 
of  the  policy. 

The  Supreme  Court  of  Iowa  said:  "  If  we  were  to  construe 
these  words  as  meaning  Maglien  Koehler  and  her  children,  it 
would  include  not  only  her  child  by  her  second  marriage,  but 
it  would  also  include  her  child  by  her  first  marriage.  Such  a 
construction  cannot,  w-e  think,  be  the  true  one.  It  is  not  to  be 
supposed  that  the  deceased  intended  at  that  time  to  make  (her 
child  by  her  first  marriage)  the  object  of  his  l)ounty  to  the 
exclusion  of  his  own  children.  The  word  "  their  "  cannot  be 
held  to  be  the  proper  one  to  designate  the  children,  because  it 

'  Procter  V.  Procter, swprffl;  Loring  '  Jackman    v.   Nelson,    Mass;    17 

V.  Loring,  supra;  Jubbor  v.  Jnbbor,  N.  E.  Rep.  529. 

9  Sim.  503;  Jones  V.  Foote,  137  Mass  ^  Lockwood  v.   Bishop,    51    How. 

543.  Pr.    221. 


276  BENEFICIARY.  [Chap.  12,  §244, 

is  an  improper  form  of  expression.  In  order  to  sustain  tlie 
interpretation  of  the  circuit  court,  it  is  necessary  to  make  the 
instrument  read  as  follows:  '  to  his  wife  Maglien  Koehler  and 
her  children  by  him.'  We  do  not  think  this  is  the  plain  and 
natural  construction  of  the  language.  We  think  it  should  be 
to  his  wife  and  his  children.  This,  it  appears  to  us,  is  not 
only  the  plain  and  obvious  construction,  but  it  accords  with 
the  grammatical  sense  of  the  words.  If  the  words  were  '  his 
wife  and  children '  there  would  be  no  doubt  that  the  meaning 
would  be  his  wife  and  his  children.  The  name  of  the  wife 
Maglien  Koehler,  is  thrown  in  as  descriptive  of  the  person 
and  not  as  designating  whose  children  are  intended." ' 

§  344.     "  Wife    and     cliilclren "    continued.     A 

certilicate  of  membership  in  a  mutual  benelit  society  provided, 
if  certaiTi  conditions  were  observed  and  performed,  for  the 
payment  of  the  sum  of  $5,000.00  on  the  death  of  the  mem- 
ber, "  to  be  paid  as  a  benefit  to  his  wife,  L.  H.  and  children 
equally."  The  member,  at  his  death,  left  his  wife  and  live 
children,  one  of  whom  died  after  suit  brought  on  the  certili- 
cate in  the  name  of  all,  leaving  his  mother  and  four  brothers 
and  sisters  as  his  only  heirs.  The  cause  proceeded  to  judg- 
ment in  the  names  of  the  widow  and  remaining  children,  who 
recovered  judgment  for  the  full  $5,000.00.  The  Supreme 
Court  of  Illinois  held  that  the  widow  and  remaining  four 
children  were  entitled  to  the  same  sum  as  though  she  and  all 
the  children  were  suing,  and  that  the  judgment  was  not  for  too 
much.  The  court  says:  "  It  is  insisted  it  was  error  of  law  to 
render  judgment  in  favor  of  the  widow  and  the  four  surviving 
children,  for  the  reason,  the  benelit  secured  was  to  be  paid  to 
the  widow  and  the  children,  equally,  of  whom  the  proof 
shows  there  were  live  when  the  suit  was  brought.  The  objec- 
tion seems  to  be,  it  was  not  proper  to  render  judgment  for 
full  value  of  the  benelit  on  a  declaration  in  favor  of  the 
widow  and  four  children,  with  the  name  of  the  deceased 
child  omitted.  It  is  not  perceived  there  was  any  error  in  so 
rendering  the  judgment.  There  are  two  views,  both  of  which 
sustain  the  action  of  the  trial  court:  First,  the  benelit  was, 
by  the  certilicate,  secured  to  be  paid  to  the  widow,  (by  name) 
and  children — that  is  to  Laura  Hoffman,  and  to  a  class  of  persons 
designated  as  children,  and  to  be  ascertained  after  the   death 

'  Koehler  v.  Centennial   Mutual,      point  McDermott  v.  Life   Associa- 
etc.,  66  Iowa  335;  see  also  to  same    tion,  24  Mo.  App.  73. 


Chap.  12,  §245.]  beneficiary.  277 

of  the  holder  of  the  certificate.  At  the  trial  it  was  found,  from 
the  proof,  there  were  but  four  children  surviving.  They  then 
constituted  all  the  class  embraced  in  the  term  '  children  '  and 
it  was  entirely  correct  to  render  judgment  in  tlieir  favor,  as 
was  done.  Second,  were  this  not  so,  the  judgment  might  be 
sustained  for  another  reason.  It  is  provided  by  the  certificate, 
that,  in  the  event  of  tlie  prior  death  of  the  beneficiaries  named, 
the  benefit  should  be  paid  to  the  legal  heirs  or  devisees  of  the 
holder  of  the  certificate.  A  correct  reading  of  this  provision 
would  be;  in  case  of  the  prior  death  of  anj^  one  of  the  class 
designated  to  take  the  benefit,  the  heirs  of  the  holder  would 
take  the  share  of  the  deceased  party.  Here,  the  plaintiffs 
were  the  heirs  of  the  holder,  and  they  took  the  whole  benefit, 
and  the  judgment  in  their  favor  was  regular,  and  authorized 
by  law."  ' 

§  345.  "  Child."  In  the  construction  of  the  designa- 
tion of  beneficiaries,  the  word  "  child "  is  not  confined  to 
persons  under  the  age  of  majority,  and  where  a  certificate  of 
insurance  is  payable  to  the  children  of  a  deceased  member,  his 
sons  and  daughters  take  the  fund  in  equal  proportions,  without 
regard  to  their  ages,  or  their  dependence  upon  the  deceased  for 
support. 

This  rule  may,  of  course,  be  modified  by  the  provisions  of 
the  contract  of  insurance.  It  is  a  part  of  the  general  plan  of 
mutual  benefit  insurance  to  enable  a  member  to  assist  his  fam- 
ily, whether  or  not  its  members  are  of  lawful  age  or  dependent 
upon  him,  but,  when  consistent  with  its  organic  law,  it  is 
pro})er  for  a  society  to  limit  its  benefits  to  minor  children,  and 
to  those  who  are  dependent  upon  the  members  for  support. 

Where  there  is  no  such  limitation  in  the  laws  of  the  society? 
and  in  the  absence  of  an  expression  by  the  member  in  his  cer- 
tificate, of  a  purpose  to  limit  the  benefit  to  a  particular  class 
of  his  children,  it  must  be  held,  on  the  plainest  principles,  that 
the  member  intended  to  extend  it  to  all  his  children. 

It  would  be  so  held  in  the  interpretation  of  a  will;  and  a 
certificate  of  insurance,  being  a  post-mortem  provision  for  the 
persons  endeared  to  the  member,  is  to  be  interpreted  upon 
similar  principles.^ 

'Covenant  Mutual  Benofit  Asso-  24  ]\Io.  Apji.  73;  Felix  v.  Grand 
ciation  v.  Hoffman,  110  111.  ()03.  Lodge,  31  Kan.  81. 

^  McDermott  v.   Life  Association 


278  BENEFICIARY.  [Chap.  12,  §245a, 

§  245a.  Child.  Grandchild.  It  may  be  laid  down 
as  a  general  rule  that  the  word  "  child  "  does  not  embrace  a 
grandchild.  ' 

But  to  this  rule  there  are  two-  classes  of  cases  which  form  ex- 
ceptions: First,  where  the  will  or  writing  would  otherwise  be 
inoperative,  or  the  manifest  intention  would  be  defeated ;  second, 
when  the  will  or  writing  shows,  bj  other  words,  that  the  word 
was  not  used  in  its  ordinary  and  proper  sense,  but  in  a  more 
extended  sense. 

In  Duvall  V.  Goodson,  79  Ky.  224,  the  charter  of  the  Ken- 
tucky Masonic  Ins.  Co.,  providing  that,  if  the  member  "  should 
leave  no  widow  or  child,  then  (the  fund)  to  be  appropriated 
according  to  his  will,  or  if  he  makes  no  will  and  leaves  no 
widow  or  child,  it  shall  vest  and  remain  in  the  company  "  etc., 
was  the  subject  of  construction,  and  the  court  held  that  where 
a  member  died  leaving  no  widow  or  children,  but  leaving  a 
grandchild,  the  word  "  child,"  in  the  charter  embraced  grand- 
child, as  to  hold  otherwise  w^ould  defeat  the  manifest  intention 
of  the  members  of  the  company.'^ 

In  Continental  Life  etc.  v.  Palmer,  42  Conn.  60;  5  Life  & 
Ace.  Cases,  37,  the  policy  was  payable  to  the  wife,  if  she  sur- 
vived her  husband;  if  not,  to  their  children.  The  husband 
survived  the  wife,  and  one  of  the  children  died  during  the 
life  of  the  father,  leaving  issue.  It  was  held  that  the  issue 
took  the  interest  to  which  his  father  would  have  been  entitled, 
if  he  had  survived  the  insured. 

Where  a  life  insurance  policy  was  issued  upon  the  life  of 
the  husband,  for  the  use  of  his  wife,  and,  if  she  died  before  him, 
the  amount  of  insurance  was  payable  "  to  her  children  for  their 
use,  or  to  their  guardian  if  under  age,"  and  the  wife  died 
before  her  husband;  it  was  held  that  a  grandchild  of  the 
insured,  the  issue  of  one  of  the  children  who  had  died  before 
his  mother,  was  entitled  to  a  share  under  the  policy.' 

The  court  says:  "  By  the  policy  in  question  an  irrevocable 
trust  was  created  in  behalf  of  Mrs.  Hull  and  her  children. 
The  same  principles  should  be  applied  in  its  construction 
which  govern  testamentary  disposition  of  property.  The 
intention  is  clear  that  in  the  event  of  Mrs.  Hull's  death  before 
the  falling  in  of  the  policy,  it  was  to  enure  to  the  benefit  of 
her  children  generally.     There  is  no  limitation  to  class  or  con- 

1  Churchill  v.    Churchill,  2   Met.        '  See  Robinson  v.   Duvall,  79  Ky. 
469 ;  Hughes  v.  Hughes,  12  B.  Mon.    83. 
121.  »  Hull  V.  Hull,  62  How.  Pr.  100. 


Chap.  21,  §246.]  beneficiary.  279 

dition,  nor  to  living  or  surviving  children.  Evidently  this 
phraseology  was  intended  to  include  the  children  of  a  deceased 
child." ' 

The  by-laws  of  a  mutual  benefit  society  provided  that,  on  the 
death  of  a  member,  a  sum  of  money  should  be  paid  "  to  the 
widow  of  such  member,  if  there  be  one;  if  he  leaves  no  widow, 
then  to  the  child  or  children,  or  to  their  lawful  guardian  for 
them,  share  and  share  alike.  Should  the  deceased  member 
leave  no  widow,  child  or  children,  the  money  shall  be  paid  to 
such  person  as  he  may  have  designated  in  writing." 

In  construing  the  meaning  of  the  words  "  child  or  children," , 
the  Supreme  Court  of  Rhode  Island  held  that  they  must  be 
taken  in  their  primary  meaning,  and  could  not  be  extended  to 
include  grandchildren.^ 

§  346.  Children  born  after  issuing  of  certificate 
of  nienibersliip.  A  widower  having  four  children  applied 
to  a  mutual  benefit  society  for  membership,  and  in  his  appli- 
cation directed  that,  in  case  of  his  death,  all  benefits  should  be 
paid  to  his  four  children,  whose  names  were  therein  given. 
He  afterward  married  and  died,  leaving  one  child  by  his  last 
wife.  The  certificate  that  issued  to  him  was  made  payable,  at 
his  death,  "  to  his  children."  The  object  of  the  society  was  to 
establish  a  benevolent  relief  fund  to  protect  families  of  deceased 
members,  and  to  assist  them  in  distress,  and,  by  the  terms  of 
its  constitution,  the  benefit  fund,  on  the  death  of  a  member, 
was  payable  "  to  his  family  or  his  heirs."  The  Supreme  Court 
of  Texas  held : 

(1)  The  'right  to  take  under  the  certificate  must  be  deter- 
mined by  its  language,  and  not  from  the  terms  used  in  the 
application  for  membership. 

(2)  The  certificate,  which  on  its  face  inured  to  the  benefit  of 
his  heirs^  extended  the  scope  of  tlie  benefit,  and  by  accepting 
it  the  member  must  be  held  to  have  approved  its  terms. 

(3)  The  object  of  the  society  being  benevolent,  its  consent 
that  the  benefit  should  exclude  an  infant  born  after  member- 
ship, cannot  result  from  construction,  l)ut  must  appear  in 
some  clear  and  explicit  way. 

(4)  The  child  born  after  the  issuance  of  the  benefit  certi- 

'  But  see  Palmer  v.  IToni,  84  N.  Y.  the  children,  under  tlie  provisions  of 

576;  Magaw  v.  Field,  48  N.  Y.   068;  wills,  took  as  classes. 

Sherman  v.  Sherman,  3  Barb.  (N.Y.)  '^  Winsor  v.  Odd  Fellows  etc.,  13 

387,  in  which  cases  it  was  held  that  R.  I.  149. 


280  BENEFICIARY.  [ClIAP.  12,  §246. 

Hcate  was  entitled  to  share  in  the  benefit,  equally  with  each  of 
the  four  children  named  in  the  application. 

In  construini^  the  contract  of  insurance,  the  court  says: 

"  The  case  presented  would  be  that  of  an  a])])lication  for  a 
certificate  for  the  benefit  of  certain  named  parties,  and  the 
issuance  of  a  certificate  for  the  benefit,  not  only  of  these,  but 
of  other  beneficiaries  also.  What  would  be  the  effect  of  such 
a  transaction?  The  applicant  would  not  be  bound  to  accept 
it,  but  if  he  did,  the  beneficiaries  would  be  those  designated 
in  the  certificate,  and  not  those  named  in  the  application.  It 
would  be  a  case  where  a  proposition  for  a  contract  was  made  by 
one  party  to  another,  which  was  accepted  in  a  materially 
modified  form.  The  party  proposing  would  not  be  bound  to 
accede  to  the  altered  contract,  but  if  he  did,  it  would  be  binding 
upon  him,  according  to  its  modified  terms.  Thomas  did 
accept  a  certificate  different  from  that  for  which  he  applied, 
and  it  would  seem  that  the  effect  of  the  contract  was  to  entitle 
all  of  his  children  to  participate  in  the  relief  fund  upon  his 
death,  and  not  those  only  w^ho  were  alive  at  the  time  the  cer- 
tificate was  issued.  But  the  appellee  contends  that  we  must 
construe  the  application  as  explanatory  of  the  certificate,  and 
must  modify  the  legal  sense  of  the  word  'children,'  so  as  to 
make  the  application  and  the  certificate  harmonize  with  each 
other;  that  Thomas  having  applied  for  a  certificate  for  the 
benefit  of  all  his  children  then  in  existence,  and  the  society  hav- 
ing issued  him  a  certificate  for  the  benefit  of  '  his  cliildren,'  we 
must  conclude  that  the  certificate  was  intended  to  accord  with 
the  application,  and  this  would  exclude  any  child  born  to  the 
applicant  in  the  future.  There  w^ould  be  some  force  in  this 
■  suggestion,  if  we  are  to  look  to  the  application  and  the 
certificate  as  alone  constituting  the  contract  between  the 
parties.  But  in  all  cases  of  contracts  formed  by  reason  of 
obtaining  membership  in  a  mutual  aid  society,  its  constitution 
and  by-laws  enter  into  the  contract,  and  it  must  be  read 
in  the  light  afforded  by  these  in  order  to  arrive  at  a  true  con- 
struction of  his  terms. 

Article  2,  Section  3,  of  the  constitution  of  the  society,  states 
that  one  of  its  objects  is  '  to  establish  a  benevolent  and  relief 
fund  for  the  protection  of  the  families  of  deceased  members, 
and  to  assist  them  in  distress  and  in  sickness.' 

Article  3,  Section  2,  makes  the  benefit  money  payable  on 
the  death  of  a  member  to  '  his  family  or  his  heirs.'  By-law 
number  seven   is  to  the  same  effect.     These  and  other  pro- 


Chap.  12,  §247.]  beneficiary.  281 

visions  of  these  instruments,  show  conclusively  that  one  of 
the  main  objects  of  the  society  is  to  confer  its  benefits  upon 
the  entire  family  of  a  member,  and  not  to  restrict  them  to  a 
portion,  to  the  exclusion  of  the  remainder.  *  *  *  *  It  may 
be  that  a  member,  with  the  express  consent  of  the  society, 
could  direct  his  benefit  money  to  be  paid  to  a  portion  of  his 
family,  to  the  exclusion  of  the  remainder,  but  the  consent  of 
the  society  would  have  to  appear  in  some  clear  and  unmis- 
takable way.  It  would  not  appear  from  doubtful  words,  much 
less  from  those  whose  legal  construction  would  evidence  a 
dissent  from  the  member's  request,  and  issuance  of  a  certificate 
more  in  accord  with  the  spirit  and  intention  of  the  constitution 
and  by  laws  of  the  society.  *  *  -^^^  *  "VVe  think  the  certificate 
on  its  face  includes  after  born  children,  and  that  it  is  more  in 
consonance  with  the  spirit  and  intention  of  the  constitution  of 
the  society  to  so  construe  it,  than  to  exclude  from  its  benefits 
the  after  born  children  of  the  applicant."  ' 

§  347.  "  Heirs,"  "  legal  heirs,"  etc.  The  word  "heirs" 
is  frequently  used  in  the  statutes  providing  for  the  organization 
of  mutual  benefit  societies,  and  in  the  certificates  of  insurance 
issued  by  such  societies,  to  indicate  a  class  of  persons  who  may, 
or  the  persons  who  shall  receive  the  benefit  fund,  on  the  death 
of  the  member.  It  often  becomes  necessary,  therefore,  to  de- 
termine who  are  the  heirs  of  the  deceased  member. 

At  common  law  one's  heirs  are  the  persons  who  would  in- 
herit his  real  estate  by  right  of  blood.  The  statutes  of  adop- 
tion and  those  of  descent  have,  in  every  state,  to  a  greater  or 
less  degree,  enlarged  the  meaning  of  the  word,  so  that  it  may 
include  persons  not  of  the  blood  of  the  intestate. 

At  common  law  the  word  had  no  reference  to  the  distribu- 
tion of  any  ])ersonalty,  and  this  rule  has  not  been  disturbed 
by  statute  in  some  states.  In  those  states,  therefore,  where 
this  common  law  rule  obtains,  the  word  "heirs"  in  a  statute 
setting  forth  a  class  of  persons  who  may  take  the  fund,  or  in  a 
certificate  designating  the  persons  who  shall  take  the  fund,  on 
the  member's  death,  must  be  taken  to  mean  the  person  or  ])er- 
sonstowhom  the  real  estate  of  the  member  will  pass,  undei- the 
statutes  of  descent,  whether  such  ])erson  or  persons  be  akin  to 
him,  or  not. 

In  most  states,  however,  the  statutes  j^rovide  not  only  who 

'  Thomiis  V.  Leak*',  07  T.^xas,  409  ;     Cliarlor  Oak,  etc,  27  Minn.,  193. 
3   S.  VV.  Kep.,  703;   See    Hicker  v. 


282  BENEFICIARY.  [Chap.  12,  §248. 

shall  inherit  the  realty  of  an  intestate,  but  also  who  shall  be 
the  heirs  of  his  personal  property. 

When  the  same  persons  are  the  heirs  of  both  the  real  and 
the  personal  property,  the  question  as  to  who  are  the  heirs,  and, 
hence,  the  beneficiaries,  is  in  no  way  complicated  by  the  stat- 
utary  provisions. 

§  348.  "  Heirs"  contiiiiiecl.  But  where,  under  the 
same  facts,  the  personal  property  descends  to  other  persons 
than  those  who  inherit  the  real  estate, — where  the  heirs  of  the 
personal  property  are  not  the  same  persons  who  are  the  heirs 
of  the  real  estate,  the  first  question  to  be  determined  is,  who 
are  to  be  taken  as  the  beneficiaries,  the  heirs  of  the  person- 
alty, or  the  heirs  of  the  realty? 

In  the  case  of  Alexander  et  at.  v.  Korthwestern  Masonic 
Aid  Association  et  al.^  the  facts  were  that  a  member  died 
holding  certificates  of  membership  in  a  society  for  $8,500 
payable  to  his  heirs.  He  died,  leaving  a  wife,  but  no  chil- 
dren. He  also  left  a  father,  mother,  three  brothers  and  a 
sister. 

The  charter  of  the  society  recited  that  it  was  formed  to 
secure  pecuniary  aid  to  the  "  widows,  orphans,  heirs,^^  etc.,  of 
deceased  members. 

Section  1  of  chapter  89  of  Statutes  of  Illinois  provides  as 
follows: 

'■'■  Second: — "Where  there  is  no  child  of  the  intestate,  nor 
descendant  of  such  child,  and  no  widow  or  surviving  husband, 
then  (the  estates,  both  real  and  personal,  of  intestates  shall 
descend)  to  the  parents,  brothers  and  sisters  of  the  deceased 
and  their  descendants,"  etc.* 

''''Third.  When  there  is  a  widow  or  surviving  husband,  and 
no  child  or  children,  or  descendants  of  a  child  or  children  of 
the  intestate,  then  (after  the  payment  of  all  just  debts)  one- 
half  of  the  real  estate  and  the  whole  of  the  personal  estate 
shall  descend  to  such  widow  or  surviving  husband  as  an  abso- 
lute estate  forever,  and  the  other  half  of  the  real  estate  shall 
descend  as  in  other  cases, .where  there  is  no  child  or  chil- 
dren, or  descendants  of  a  child  or  children." 

The  Supreme  Court  of  Illinois  has  decided  that,  under 
clause  third  just  quoted,  the  widow  takes  as  the  heir  of  the 
husband." 

'  In  the  Supreme  Court  of  Cook  ed,  but  appealed  to  the  Supreme 
County  and  in  the  Appellate  Court    Court. 

of  111.,  First  District,  not  yet  report-        '^  Sutherland  v.  Sutherland,  69  111. 

481 ;  Rawson  v.  Rawson,  52  111.  62. 


Chap.  12,  §249.]  beneficiary.  283 

The  question  for  decision  was,  who  are  the  heirs  of  the 
decedent,  and  the  beneliciaries  of  the  certificates? 

The  Superior  and  Appellate  Courts  hold  that  the  "widow 
is  the  sole  heir  at  law  to  the  personal  property  of  the  de- 
ceased, and  the  other  heirs  at  law,  the  father,  motlier,  broth- 
ers, etc.,  have  no  right  title  or  interest  in  said  fund,  or  any 
part  thereof." 

There  is  no  discussion  of  principles  in  the  opinion,  nor 
are  any  reasons  given  for  the  decision. 

It  is  manifest,  however,  that,  in  such  a  case  as  the  one  un- 
der consideration,  it  is  necessary  to  hold  either  that  the  heirs  of 
the  real  estate  are  the  beneliciaries,  that  the  heirs  of  the  per- 
sonal estate  are  the  beneliciaries,  or  that  the  heirs  of  the  real 
and  personal  estate  are  entitled  to  the  fund.  Of  course  the 
fund  was  no  part  of  the  estate  of  the  intestate,  but  if  it  had 
been,  it  would  have  been  a  part  of  his  personal  estate.  The 
fund  is  personal  property.  Nothing  is  more  natural,  there- 
fore, than  to  regard  the  heirs  of  the  intestates'  personal  prop- 
erty as  the  beneliciaries  designated  in  the  contract  of  insur- 
ance as  "  my  heirs."  In  this  connection,  reference  maj'^  also 
be  made  to  the  well  settled  principle  that  the  word  "  heirs  " 
is  flexible,  and  that,  in  the  construction  of  wills,  in  the  case  of 
personalty,  it  is  taken  to  mean  next  of  kin.' 

§349.  "  Heirs  "  continued.  By  the  statutes  of  des  • 
cent  of  Tennessee,  the  real  estate  of  an  intestate  owner  is  in- 
herited "  by  all  the  sons  and  daughters  of  the  deceased,  to  be 
divided  amongst  them  equally."  By  the  statutes  of  distribu- 
tion, the  personal  property  of  an  intestate  owner  is  to  be  dis- 
tributed '*•  to  the  widow  and  children,  or  descendants  of  chil- 
dren representing  them,  equally,  the  widow  taking  a  child's 
share." 

A  member  of  a  society  died  leaving  surviving  him  a  widow, 
three  children  and  two  grandchildren,  the  children  of  a  son 
who  died  before  him.  He  also  left  a  certificate  of  insurance 
payable  to  his  "  legal  heirs."  In  certain  litigation  which  arose 
concerning  the  beneflt  fund,  it  became  necessary  for  the 
Supreme  Court  of  Tennessee  to  decide  who  were  the  bene- 
ficiaries named  in  the  certificate,  and  that  court  held  that  the 
widow,  children  and   grandchildren,  the  distributees  of   the 

'  Vaux    V.  Henderson,  2   Jac.    &     Hodge's  Appeal,  8  Weekly  Notes  of 
Walker's  Chancery  Rept.388;  Ward     Cases,  209;  see  ^258. 
V.  Saunders,  3  Sneed  (Tenn.)    387 ; 


284  BENEFICIARY.  [Ohap.  12,  §252. 

personal  estate  of  the  intestate,  under  the  statutes  of  distribu- 
tion, M'ere  the  beneficiaries,  and  were  entitled  to  the  fund.' 

§  350.  "  Heirs "  continued.  Wliere  the  statutes  of 
a  state  provide  different  courses  of  descent  for  ancestral  and 
non-ancestral  property,  every  reason  and  analogy  point  to  tlie 
proposition  tliat  a  benefit  fund  derived  by  contract  from  a 
mutual  benefit  society  shall  go  to  those  persons  who  are  the 
heirs  of  the  non -ancestral  property  of  the  decedent.'' 

§  251.  Heirs  continued.  It  is  evident  that  the 
statutes  of  the  different  states  must  determine  the  question  as 
to  who  are  the  heirs  of  an  intestate,  and  that  the  persons  who 
will  take  the  fund  under  a  designation  of  "  my  heirs  "  in  one 
state,  may  have  no  interest  in  the  fund  under  the  laws  of  some 
other  state.  Thus,  in  Indiana,  a  certificate  payable  to  the 
"  legal  heirs  "  of  a  member,  when  he  leaves  a  widow  and  chil- 
dren at  liis  death,  is  payable  to  all  of  them.  His  widow,  in 
such  case,  is  included  in  the  word  "  heirs."  '  In  Illinois,  in 
such  case,  she  is  not  included  among  the  beneficiaries.*  > 

§352.  "Heirs"  continued.  The  words  "my  legal 
heirs,"  "  my  heirs  at  law,"  "  my  heirs,"  etc.,  as  used  in  wills, 
have  frequently  been  the  subject  of  judicial  construction. 
The  meaning  of  these  words,  when  taken  alone,  is  usually 
plain  enough,  but  the  contention  always  is  that,  from  the  con- 
text, it  is  evident  that  they  were  used  in  some  other  than  the 
ordinary  sense.  In  a  will,  the  testator  usually  makes  provision 
for  several  persons,  and,  in  several  clauses  of  the  instrument, 
gives  and  bequeaths  his  property.  In  such  cases,  the  context 
often  controls  the  meaning  of  words  used.  But  in  mutual 
benefit  insurance,  such  words  and  phrases  are  used  only  in 

'  Gosling,  Guardian,  v.   Caldwell,  lesnal  heirs  or  divisees  of  the  holder 

69  Tenn.  (1  Lea.)  454.  of  the  certificate.     The  court  says: 

^  Jamieson  v.  Knight  Templar  and        "  A  correct  reading  of  this  provis- 

Masonic  Mutual  Aid  Association,  12  ion-would  be,  in    case  of   the   prior 

Cin.  Law  Bull.  272.  death  of  any  one  of  the  class  desig- 

^  Wilburn    v.    Wilburn,    83    Ind.  nated  to  take  the  benefit,  the   heirs 

55.  of  the  holder  would  take  the    share 

*  Gauch  V.  Ins.  Co ,    88    111.    251;  of    the  deceased    party.     Here    the 

But  in  The  Covenant  Mutual  Benefit  plaintiffs  (the  widow  and  four  child- 

Assopiation  V.  Hoffman  e<  a?.  110  111.  ren)  w^ere  the  heirs  of    the  holder, 

603,  it  was  provided  by  the  certifi-  and  they  took  the  whole  benefit,  and 

cate  that,  in  the  event  of  the    prior  the  judgment  in    their    favor    was 

death  of    the  beneficiaries    named,  regular.aud  authorized  b}'  law." 
the  benefit  should  be  paid    to   the 


Chap.  12,  §253.]  benehciary.  285 

answer  to  such  questions  as,  "  To  whom  shall  the  beneiit  fund 
be  paid?  "  "  Whom  do  you  designate  as  your  beneficiaries?  '^ 
etc.  The  answer  is  usually  short,  and  to  the  point;  "my 
heirs,"  "  my  legal  heirs,"  etc.  The  other  provisions  of  the 
contract  relate  to  matters  entirely  apart  from  the  disposition 
of  the  fund.  When  we  come,  therefore,  to  place  a  construction 
u])on  tins  designation  of  the  beneficiary,  we  are  seldom  met 
with  other  provisions  of  the  certificate  u])on  the  same  subject, 
from  which  the  theory  may  be  drawn,  that  the  member  in- 
tended to  use  the  words  in  a  difierent  sense  than  the  ordinary 
one.  Ordinarily  there  is  no  ambiguity  in  the  contract,  and 
recourse  must  be  had  to  the  statutes  alone  to  find  out  who  are 
the  legal  heirs  of  the  intestate. 

The  interpretation  given  by  the  courts  to  such  terms  and 
words,  when  used  in  wills  and  controlled  by  other  words,  will, 
now  and  then,  be  of  the  first  importance  in  determining  the 
proper  construction  ti»  be  given  to  the  designation  of  benefi- 
ciaries made  by  a  member  of  a  mutual  benefit  society.  But  so 
many  of  these  decisons  have  direct  application  to  the  statutes 
of  the  states  in  which  they  are  rendered,  that  no  attempt  will 
be  made  to  review  them  here. 

§253.  '*  Heirs  "  continued.  The  designation  of  the 
beneficiary,  as  set  forth  in  the  certificate,  must  be  construed 
with  reference  to  the  law  under  which  the  society  is  organized, 
the  charter,  the  constitution  and  the  by-laws.  The  provisions 
of  these  form  the  context  which  may  control  the  meaning  of 
the  designation.  From  this  fact,  it  is  evident  that  it  is  often 
necessary  to  do  more  than  to  resort  to  the  statutes  of  the  state 
to  determine  who,  under  their  provisions,  are  the  legal  heirs. 
It  is  not  always,  by  any  means,  a  plain  (piestion  of  statutory 
provision,  but,  on  the  contrary,  it  is  often  a  matter  involving 
a  nicety  of  distinction,  and  a  careful  consideration  of  the  whole 
contract  of  insurance,  in  connection  with  the  statutes,  to 
declare  who  are  the  beneficiaries  of  the  contract,  under  the 
designation  of  "  my  heirs  "  etc.  Some  instructive  cases  illus- 
trating this  fact  are  reviewed  further  along  in  this  chapter. 

The  word  "  heirs  "  has  a  technical  signification,  and  where 
there  is  nothing  in  the  context  to  show  that  it  was  used  in  any 
other  sense,  it  will  be  presumed  tliat,  in  the  certificate,  the 
term  "  legal  heirs,"  "  heirs  at  law,"  or  "  my  heirs,"  was  used  in 
its  strict  and  primary  sense.  In  certain  contingencies, 
brothers,  sisters,  parents,  and  even  remote  kindred  are  heirs  at 
law,  but  it  would  be  absurd  in  the  extreme  to  suppose  that  a 


286  BENEFICIA.RY.  [Chap.  12,  §255. 

member  of  a  mutual  benefit  society,  who  has  designated  his 
"  legal  heirs  "  as  his  beneficiaries,  intended  tliat  all  his  kin- 
dred should  take.  The  legal  presumption,  in  such  case,  would 
clearly  be,  that  he  intended  those  to  whom  the  law  would  give 
his  property — he  dying  intestate;  and,  hence,  it  is  the  actual 
capacity  of  inheritance,  at  the  time  of  the  death  of  the  owner 
of  the  property,  and  not  the  fact  that  a  particular  person  might 
have  inherited  from  him,  under  a  state  of  facts  which  did  not 
exist,  that  determines  who  is  an  heir  of  a  decedent.' 

§  254.  "Heirs"  continued.  "When,  under  the  law 
of  a  state,  the  widow  is  an  heir  of  her  deceased  husband,  and, 
under  the  facts  of  a  case,  is  his  sole  heir  at  law,  it  is  immater- 
ial, as  showing  the  intention  of  the  deceased  member,  that  he 
made  his  certificate  payable  to  his  "  heirs,"  and  not  to  his 
"  heir"  at  law.  By  the  use  of  the  word  "  heirs  "  the  member 
meant  what  he  said — that  whoever  might  prove  to  be  his  heirs, 
and  nemo  est  haeres  vivefitis,  should  have  the  benefit  fund. 
His  heirs  might  be  one  or  more  persons.  His  widow  might, 
and  might  not,  be  one  of  them.- 

§  255,  "Heirs"  continued.  By  the  charter  of  a 
mutual  benefit  society,  the  persons  whom  the  insured  could 
designate  as  beneficiaries  were  limited  to  his  widow,  his  orphan 
children  and  other  persons  dependent  upon  him,  and  the  by-laws 
of  the  association  provided  that,  if  the  assured  made  no  desig- 
nation, the  amount  should  be  paid  to  his  widow,  or,  if  he  left 
no  widow,  to  the  guardian  or  trustee  of  his  minor  children. 
The  insured,  at  the  time  of  making  his  designation,  had  a  wife 
and  two  daughters,  and,  in  his  application  for  membership,  in 
answer  to  the  question,  "  To  whom  will  you  have  your  death 
loss  paid?",  answered,  "To  my  heirs,"  and,  in  reply  to  a 
request  to  state  the  relationship  of  any  of  the  persons  to  whom 
payable,  answered,  "  Wife  or  daughters."  The  wife  survived 
the  insured.  Upon  these  facts  the  Supreme  Court  of  Massa- 
chusetts held  that  "  the  meaning  is  sufiiciently  plain  that  he 
intended  that  the  payment  should  be  to  his  widow,  or,  if  he 
left  no  widow,  to  his  surviving  daughters.  *  *  The  inten- 
tion that  the  money  should  be  divided  between  the  widow 
and  surviving  children  is  not  in  accordance  with  the  purpose 

'Gauch  V.  St.  Louis  Mutual  Life,  '  Jamieson  v.  Knight  Templar 
etc.,  88  111.  2.51;  Elsey  v.  Odd  Fel-  etc.  Association,  13  Cin.  Law  Bull, 
lows  Ass'n,  7  N.  E.  Kep.  844.  272. 


Chap.  12,  §256.]  beneficiaey.  287 

of  the  association.  *  *  If  there  was  any  designation,  it  was 
to  the  widow,  or  if  there  should  be  no  widow,  to  the  surviving 
daughters.  If  there  was  no  valid  designation,  the  widow  is 
entitled  to  the  money.  It  is,  therefore,  unnecessary  to  consider 
the  several  objections  presented  to  the  sufficiency  or  validity 
of  the  designation.  In  any  aspect  of  the  case,  the  money  is  to 
be  paid  to  the  widow."  ' 

In  Kentucky  Masonic,  etc.,  v.  Miller's  Administrator,  13 
Bush.  (Ky.)  489,  the  charter  of  the  society  provided  that  the 
benefit  fund  should  be  paid  to  the  widow  and  children  of  the 
deceased  member,  according  as  the  will  of  said  deceased  mem- 
ber should  direct,  or,  if  he  should  leave  no  widow  or  child,  then 
to  be  appropriated  according  to  his  will,  etc.  A  member  took 
out  a  certificate  payable  to  his  "  heirs,  or  as  he  niay  direct  in 
his  will."  He  died  intestate  leaving  a  widow  and  no  children, 
and  his  widow  and  not  his  administrator,  was  held  to  be 
entitled  to  the  funds.  The  court  says:  "The  charter  prescribes 
who  may  become  members  of  the  company,  and  their  obliga- 
tions, and  who  shall  be  beneiiciaries  of  the  membership  after 
the  death  of  the  member,  and  it  is  not  in  the  power  of  the 
company,  or  of  the  member,  or  of  both,  to  alter  the  rights  of 
those  who,  by  the  charter,  are  declared  to  be  beneiiciaries, 
except  in  the  mode  and  to  the  extent  therein  indicated." 

§  256.  "  Heirs  "  continued.  The  words  "  heirs  "  and 
"  next  of  kin "  may  be  so  used  in  association  with  other 
language,  and  under  such  circumstances,  as  to  show  an  inten- 
tion to  include  others  than  blood  relations. 

A  member  of  a  mutual  benefit  society  had  no  near  relative 
by  blood,  except  a  brother,  of  whom  his  wife  knew  nothing, 
and  who  was  living  in  Europe.  The  member  was  on  the  most 
cordial  terms  with  his  wife,  whom  he  had  married  more  than 
twelve  years  before,  and  by  whom  he  had  one  child  and,  after- 
ward had  another.  He  was  a  foreigner,  and  presumably  not 
well  acquainted  with  the  English  language.  He  Nvas  illiterate, 
for  in  his  application  for  insurance  he  designated  as  his  bene- 
ficiaries "  my  lea<jal  heirosy  He  afterward  made  a  will,  giving 
all  his  personal  estate  to  his  "  beloved  wife,"  but  left  little 
provision  for  her  when  he  died,  except  such  as  the  certificate 
might  afford  her.     He  left  no  children,  father,  mother,  brother 

'  Addison  V.  New  P^ngland  Com- 
mercial Traveler's  Ass'n.  Mass.  12 
N.  E.  Kep.  407. 


288  BENEFICIARY.  [ClIAl>.   12,  §257. 

or  sister  survivin<4'  hiui,  exce]~)t  the  brother  who  chaiiiied  the 
fund  nnder  the  term  "  my  leagal  lieirosy 

The  court  says  :  "All  this  is  entirely  inconsistent  with  the 
theory  that  he  used  the  phrase  "  legal  heirs  "  in  its  ordinary 
acceptation;  but  he  intended  thereby  to  designate  his  wife  and 
children,  if  he  should  leave  any;  and  this  is  the  meaning  often 
attached  to  the  phrase  by  the  unlearned,  especially  when  only 
personal  property  is  concerned.' 

§  257.    Ill  what  proportion  heirs  take  the  fund. 

When  gifts  by  will  to  heirs-at-law  are  made  to  them  simplic- 
iter,  the  persons  to  take,  and  the  proportion  which  they  shall 
take,  must  be  determined  by  the  statute  of  descent  and  distri- 
bution. The  will,  in  such  a  case,  not  only  designates  who  are 
to  take,  but  also  the  quantum  of  the  estate  taken. ' 

For  the  purpose  of  ascertaining  the  persons  who  are  the 
beneficiaries  under  a  designation  of  "  my  heirs,"  etc.,  it  is 
necessary  to  consult  the  statutes  of  the  state,  casting  the 
descent  of  the  property  of  an  intestate.  But  from  this  it  does 
not  follow  that  the  statute  determines  the  proportion  of  the 
fund  which  each  heir  shall  take.  When  a  member  has  made 
his  certiicate  payable  to  his  "heirs,"  the}-  do  not  take  the  fund 
by  descent,  but  by  contract.  The  statutes  of  descent  and  dis- 
tribution cease  to  be  of  use,  therefore,  at  the  very  moment 
when  the  heirs  at  law  of  the  intestate  have  been  found  accord- 
ing to  their  provisions.  They  point  out  the  persons  whom  the 
contract  declares  shall  be  the  beneliciaries,  but  they  do  not 
determine  the  rights  of  such  persons  under  the  contract. 
The  rights  of  the  beneliciaries,  in  a  certificate  taken  out  by 
a  member,  are  such  as  the  contract  confers,  and  are  not 
rights  arising  by  operation  of  statutory  rules.  The  contract, 
and  not  the  statute,  fixes  their  rights,  and  they  have  such  rights 
only  as  the  contract  of  insurance  vests  in  them.  We  are, 
therefore,  to  look  to  the  terms  of  the  agreement,  and  not  to 
the  provisions  of  the  statute,  to  ascertain  the  rights  of  the 
parties.^ 

Where  a  member  of  a  society  makes  his  certificate  payable 
to  his  legal  heirs,  and  dies,  leaving  a  widow  and  children,  the 
widow,  where  she  is  the  heir  of  her  husband,  and  entitled  to 

'  Kaiser    v.     Kaiser,    24    N.    Y.  Baskin's  Appeal,  3  Pa.  St.,  304. 

Weekly  Dig.  410;  18  Daly  523.  "  \yiii3„].n  v.    Wilburn  6i!    al.,   83 

*  Rawson  v.  Rawson,   52    111 ,    62 ;  Ind  ,  55. 
Richards  v.   Miller,    62    111.,     417; 


Chap.  12,  §258,]  beneficiary.  289 

a  larger  part  of  his  estate  than  any  one  of  his  children,  is  not 
the  snperior,  or  the  inferior  of  her  joint  beneticiaries,  but  their 
equal.  This  is  in  harmony  with  the  general  principle  that 
when  a  benefit  is  granted  to  several,  and  their  respective  pro- 
j)ortions  are  not  specified,  the  beneficiaries  take  equally.' 

In  Gosling  v.  Caldwell,  69  Tenn.  (1  Lea)  454,  the  contrary 
doctrine  was  held  to  be  the  law.  A  member  of  a  society  died 
leaving  a  widow,  three  children  and  two  grandchildren,  the 
children  of  a  son  who  died  before  him.  llis  certificate  was 
payable  to  his  "  legal  heirs."  The  court  held  that  the  widow, 
tlie  three  children  and  the  two  grandchildren  were  entitled  to 
the  fund,  and  that  "  the  chancellor's  decree,  giving  one  fifth 
of  the  fund  to  the  grandchildren,  must  be  affirmed."  Nothing 
further  is  said  in  the  opinion,  as  to  the  quantum  which  each 
beneficiary  shall  take,  under  such  a  designation,  than  the 
language  above  quoted." 

§  258.  Leg-al  Representatives.  The  words  "  legal  repre- 
sentatives" in  a  contract  of  insurance,  designating  tlie  ben- 
eficiaries, when  there  is  nothino:  in  the  context  or  surroundino- 
circumstances  to  indicate  a  contrary  intention,  mean  "  execu- 
tors or  administrators." 

A  certificate  of  membership  payable  to  the  legal  representa- 
tives of  the  insured  member,  is  the  same  as  if  made  payable 
to  himself.  But  where  the  charter  of  a  society  provides  that 
certain  j^ersons  only  may  be  beneficiaries,  as  for  instance,  tlie 
widow,  orphans,  and  heirs  of  deceased  members,  the  term 
"  legal  representatives,"  as  designating  beneficiaries,  will  be 
construed  with  reference  to  the  charter,  as  meaning  those  who 
are  the  legal  representatives  of  the  member  in  conteinpLation 
of  the  charter.^ 

'Wilburn  v.  Wilburn    et  al.,  83  where  the  policy  is  payable  to  the 

liid.,    55;     Crocket    v.    Crocket,    2  estate   of  the  insured,  to  his  lesial 

Philips,  553;  Allen  v.  Hoyt,  5  Met.,  representatives,  or  to  himself,  is  iiot 

334.     See  g  265.  stated  in  the  opinion,  but   the  case 

^A  statute  of  Tenne.ssee   provides  seems  to  have  been  decided  without 

that  where  a  husband   takes  out  a  reference  to  this  statute,  both  ui)()n 

policy  of  insurance  on  his  life,   it  this   point    and    the    further   point 

shall,   on   his  death,   accrue  to  the  reviewed   in   ):;   249,  viz.,  that  those 

benefit  of  his  widow  and  heirs,  to  be  who     take    the    personalty    of    an 

divided  between    tiiem  according  to  intestate,  and  not  tho.se  who  iniierit 

the  law  of  distribution,  free  from  the  his  realty,  are  the  beneficiaries,  under 

claims  of  creditors.     Whether  that  a  desiunation  of  his  "  le^ral  heirs,"  in 

statute   has  any  application  to  this  a  certificate  of  insurance, 

case,  where  the  policy  is  payable  to  ^  Kelicf  Association  v.  McAuley, 

the  "legal  heirs"  of  tiie  insured,  or  2  Mackey  D.  C.  70. 
whether  it  is  applicable  only  in  cases 
lO 


290  BENEFICIARY.  [ClIAP.  12,  §259. 

A  certificate  made  i^ayable  to  the  wife  and  children  of  the 
member,  or  their  "  legai  representatives,"  was  held  to  he  for 
the  benefit  of  the  only  child  of  the  last  survdvor  of  the  chil- 
dren of  the  insured,  the  wife  and  other  children  having  died 
without  issue.  The  court  says!  "  Here  (the  certificate)  is  pay- 
able to  the  children  or  '  their  representatives.'  This  expres- 
sion shows  that  the  possibility  of  the  death  of  some  or  all  of 
the  children  during  the  life  of  the  insured  was  not  overlooked, 
and  that  such  an  event  was  intended  to  be  provided  for.  And 
when  we  consider  the  nature  and  design  of  life  insurance,  and 
the  relation  of  the  parties,  we  think  the  policy  should  be  con- 
strued as  if  it  were  payable  to  such  of  the  children  as  should 
survive  the  insured,  and  the  surviving  issue  of  such  as  might 
die  during  his  life."  ' 

Where,  by  an  article  of  the  by-laws  of  a  society,  it  is  pro- 
vided that  the  benefit  fund  may  be  disposed  of  in  a  certain 
manner  by  the  member,  but,  if  not  so  disposed  of,  it  shall  go 
to  the  heirs  and  legal  representatives  of  such  member,  by  the 
words  "  heirs  and  legal  representatives,"  as  applied  to  personal 
property,  is  evidently  meant  next  of  him,  as  ascertained  by  the 
intestate  laws.^ 

§  259.  Meanings  of  the  word  "orphans"  as  used 
"by  societies.  The  word  "  orphans  "  is  frequently  used  in 
the  laws  providing  for  the  organization  of  mutual  benefit 
societies,  and  in  the  contracts  of  insurance  issued  by  them. 
It  is  not  so  used  in  a  technical  sense,  as  meaning  minors  or 
infants  who  have  lost  both  of  their  parents.  It  may  be  stated 
that,  from  the  various  provisions  of  the  charter,  by-laws  and 
certificates,  it  will  appear  that  the  word  "  orphans,"  as  used  by 
a  society,  means  children  of  a  deceased  member,  whether  their 
mother  is  living  or  not,  and  whether  they  are  over  or  under 
the  age  of  majority. 

The  charter  of  the  Royal  Arcanum  society  declares  one  of 
its  objects  to  be  to  assist  "the  widows  and  orphans  of  deceased 
members,"  and  to  establish  "a  widows'  and  orphans'  benefit 
fund."  The  constitution  provides  that  from  this  fund  a  sum 
of  money  shall  be  paid  to  a  member's  family,  or  those  depend- 
ent on  him,  as  he  may  direct.  A  certificate  was  issued  to  a 
member,  payable  to  his  wife  "  for  the  benefit  of  herself   and 

'  Robinson  V.  Duvall,  79  Ky.  83;  of  Cases  (Pennsj'lvania)  209;  Eisey 

see  Benefit  Association  V.  Ho&man,  v.  Odd  Fellows' Mutual;  Mass.  7  N. 

110  111.  603.  E.  Rep.  844. 

-  Hodges'  Appeal,  8  Weekly  Notes 


Chap.  12,  §260.]  beneficiaky.  291 

the  children  of  said  member."  It  was  held  that,  under  these 
provisions,  the  benefit  fund  was  payable  equally  to  his  widow, 
his  child  by  her,  and  his  two  children  by  a  previous  wife,  one 
of  whom  was  twentj^-three  years  of  age, — all  the  children  being 
orphans  within  the  meaning  of  the  charter. ' 

§  360.  When  the  ineniber  becomes  a  benefi- 
ciary by  inheritance.  A  benelit  certificate  is  often  made 
payable  to  the  wife  and  children  of  the  member.  As  any  one, 
or  all  of  such  designated  beneficiaries  may  die  before  the 
member,  it  l)ecomes  important  to  determine  whether  the 
member  hijnself  becomes  a  beneficiary  by  inheritance  from 
;any  beneficiary  so  dying.  Generally  speaking,  it  may  be  said 
that  he  does  not.  Under  the  general  plan  of  mutual  benefit 
insurance,  the  beneficiary  has  no  vested  right  in  the  benefit 
fund,  and  the  persons  who  may  be  beneficiaries  are  limited  so 
as  to  exclude  the  member  and  his  estate  from  taking  the  fund. 
But  -these  features  of  this  general  plan  are  changed  in  some 
societies;  and  if  the  beneficiary  so  dying  had  a  vested  right  in 
the  fund,  and  if  the  estate  of  the  member  may,  under  the  con- 
tract, take  the  fund,  then  the  case  does  not  differ  from  ordi- 
nary life  insurance,  and,  according  to  the  weight  of  authority, 
the  member  becomes  a  beneficiary  under  the  contract,  where 
he  is  the  heir  of  the  beneficiary  so  dying. 

A  mutual  benefit  society  issued  to  A.  a  certificate  of  mem- 
bership which  entitled  "  his  wife,  her  heirs  or  assigns,  upon 
the  death  of  said  A.  to  $3,000.00."  The  wife  died  intestate 
■during  A's,  lifetime  leaving  children,  and  afterward  A.  died. 
As  A.  survived  his  wife,  he,  or  his  estate  was  entitled  to  a  share 
as  her  heir. 

The  Supreme  Court  of  Pennsylvania  says:  "The  fact  that 
this  association  has  some  features  to  distinguish  it  from  a  life 
insurance  company  does  not  establish  any  error  in  this  judg- 
ment.    The  husband  inherited  from  his  wife.^ 

'  Jackraan  v.   Nelson,  Mass. ;    17  death  prior  to  his;  Ilutson  v.  Merri- 

N.  E.  Rep.  529.  field,  51  Ind.  24;  Glanz  v.  Gloeckler 

''Mutual   Aid   Society  v.    Miller,  10  111.  App.  484;   atHrmed   104    111. 

107>Pa.  St.  162 ;  See  Andersou's  Ap-  573;    Endie  v.   Slemmons,  26  N.  Y. 

peal,  85  Pa.  St.  202;  Deginther's  Ap-  9;  Kiiickerbooker  Life  etc.  v.  Weitz, 

peal,  83  Pa.  St.  337,  where   policies  99  Mass.  157;  North  American  Life 

were  payable  to  the  wife  of  the   in-  etc.  v.  Wilson,  111  Mass.   542;    Con- 

sured  "her  executors,  administrators  tinental  Life  v.    Palmer,    42    Conn, 

and  assigns,"  and  the  husband   was  CO. 
Jield  to  take  as    her  heir  upon   her 


292  BENEFICIARY.  [ClIAP.  12,  ^261, 

§  261.  Same  subject  continued.  It  is  held  in 
some  courts  that  a  certificate  of  membership,  as  between  the 
member  and  the  society,  is  strictly  and  only  a  contract  forth© 
payment  of  money  npon  the  happening  of  a  contingency,  nn- 
certain  only  as  to  the  time  whdn  it  will  occur,  and  is  subject 
to  the  genei'al  rules  which  govern  in  the  interpretation  of 
contracts.  But  when  considered  with  respect  to  the 
rights  of  those  who  claim  to  be  beneficiaries,  especially  wlien 
they  are  the  natural  objects  of  the  affection  and  bounty  of  the 
person  procuring  and  paying  for  the  insurance,  it  should  be 
regarded  in  the  light  of  a  testamentary  provision  rather  than, 
of  a  contract,  and  should  be  interpreted  on  similar  prin- 
ciples.' 

A  man  took  out  a  policy  of  insurance  on  his  life,  payable  to> 
his  wife  and  children,  or  their  legal  representatives.  At 
the  date  of  the  policy  the  insured  had  three  children,  all 
minors  and  unmarried.  In  a  few  days  thereafter  his  wife 
died.  He  died  on  April  7,  1878,  having  survived  all  his 
children.  Two  of  the  children  died  in  infancy  and  unmarried; 
and  one,  having  married,  left  an  only  child  and  her  husband 
surviving  her.  Before  his  death,  and  after  the  death  of  all  his- 
children,  the  insured  assigned  and  delivered  the  policy  to  his 
niece,  intending  it  as  a  gift  to  her.  The  question  to  be  decided 
was  whether  the  grandson,  or  the  niece  of  the  insured  wa& 
entitled  to  the  benefit  fund.  On  behalf  of  the  niece  it  was 
contended  that  upon  the  delivery  of  the  policy,  the  wife  and 
the  three  children  of  the  insured  became  invested,  each  with  a 
one-fourth  interest  in  it;  and  that,  upon  the  death  of  the  wife, 
her  interest  passed  to  her  husband  under  the  statutes  of  dis- 
tribution; and  that,  at  the  death  of  the  unmarried  daughters, 
their  interests  passed  to  their  father  in  the  same  way;  and  that 
at  the  death  of  the  married  daughter,  during  the  life  of  her 
father,  her  interest  lapsed  as  if  it  had  been  a  legacy;  and  in 
this  way  the  insured  became  the  owner  of  the  entire  policy, 
and  could  invest  his  niece  with  a  good  title. 

But  the  court  said:  "  In  taking  the  policy,  the  insured  was 
not  providing  for  himself,  but  for  his  wife  and  children  after 
his  death;  and  it  would  be  unreasonable  to  suppose  that  he 
intended,  in  case  one  of  these  objects  of  his  affection  should 
die  during  his  life,  that  the  interest  of  the  one  so  dying  should 

1  Robinson  V.  Duvall,  79  Ky.  83;  Mackey  (D.  C)  19;  McDermott  v. 
Duvall  V.  Goodson,  79  Ky.  224;  En-  Centennial  Mutual  etc.,  24  Mo.  App. 
dowment  Association   v.    Wood,    4    73. 


Chap.  12,  §262.]  beneficiary.  293 

pass  to  himself,  and,  at  his  death,  to  his  personal  representa- 
tive. It  would  be  more  consistent  with  his  evident  design  in. 
insuring  his  life  for  the  benefit  of  all  his  family — wife  and 
children  alike — to  suppose  that  his  intention  was,  that  in  case 
one  or  more  should  die  before  himself,  without  leaving 
children,  the  share  to  which  those  dying  would  have  been 
entitled,  had  they  survived  him,  should  go  to  the  survivors. 
He  dedicated  the  whole  to  his  family,  share  and  share  alike, 
and  as  the  family  was  reduced  by  death,  and  he  came  to  renew 
the  policy,  by  paying  the  annual  premiums,  it  can  scarcely  be 
doubted  that  he  did  so  in  order  to  provide  for  those  who  still 
survived;  and  this  evident  intention  ought  not  to  be  defeated 
unless  there  are  insurmountable  legal  obstacles  in  the  way  of 
effectuating  it." 

§  362.  When  estate  of  the  beneficiary  does  not 
take  the  fund.  It  is  a  general  principle  of  mutual  benefit 
insurance,  that  the  beneficiary  named  in  a  certificate  acquires 
no  vested  rights  in  the  benefit  fund,  until  the  death  of  the 
member.  It  follows  from  this  that  when  a  designated  bene- 
ticiary  dies  prior  to  the  death  of  the  member,  the  benefit  fund 
does  not,  on  the  subsequent  death  of  the  member,  go  to  the 
administrator,  nor   descend  to  the  heirs  of  such   beneficiary. 

This  general  principle  may,  of  course,  be  changed  by  statute, 
charter,  by-laws,  or  the  certificate,  but  there  are  few  mutual 
benefit  societies  in  which  any  such  change   has   been   made. 

A  member  of  a  society  appointed  his  wife  as  his  beneficiary, 
but  the  contract  of  insurance  did  not  designate  to  whom  the 
fund  should  be  ]>aid,  in  case  the  beneficiary  died  before  the 
member.  The  ap])ointment  did  not  vest  in  the  beneficiary  the 
absolute  right  to  the  fund.  It  was  held,  under  these  facts, 
that  the  appointment  was  revoked  by  the  death  of  the  benefic- 
iary; that  liev.  St.  Wis.  §  2347,  which  empowers  a  husband 
to  insure  his  life  in  favor  of  his  wife,  and  provides  that  such 
insurance  shall  inure  to  her  separate  use,  and  that  of  her 
children,  does  not  apply  to  mutual  l»eiiefit  insurance." 

The  charter  of  a  society  ])rovide(l  for  payment  of  the  benefit 
fund,  in  case  of  death,  to  the  legal  representatives  of  a  member, 
and  the  by-laws  provided  for  payment  of  the  fund,  in  case  of 
failure  to  designate  a  beneficiary,  to  the  legal  representatives 
of  the  deceased.     A  member  designated  his  wife  as  his  bene- 

1  Robinson  v.  Duv;ill,  79  K}'.  83 ;        -  Given    v.   Wisconsin   Odd    Fel- 
See  Covenant  Mutual,  etc.  v.    Hofi-     lows,  etc.,  Wis.  37  N.  W.  Rep.  817. 
man,  110  111.  G03. 


294  BENEFiciAKY.  [Chap.  12,  §263. 

ficiary.  She  died  before  he  did,  but  he  did  not  make  a  new 
designation.  The  court  held  that,  under  the  charter  and  by- 
laws, if  a  member  failed  to  appoint  a  benehciary,  or,  if  at  the 
date  of  his  death,  there  is  no  appointee  named  by  him,  alive 
and  capable  of  taking,  it  is  to  go  to  his  legal  representatives, 
and  in  this  case  it  was  held  that  his  representatives,  not  hers, 
took  the  fund.' 

The  object  of  a  society,  as  declared  by  the  charter,  was  "  to 
provide  and  maintain  a  fund  for  the  benefit  of  the  widow, 
orphan,  heir,  assignee  or  legatee  of  a  deceased  member,"  By 
a  provision  of  one  of  the  by-laws,  if  a  deceased  member  had 
no  "  legal  representatives,"  the  fund  should  become  the  prop- 
erty of  the  association. 

A  member  made  the  following  designation  of  beneficiary  in 
his  application.  "  In  the  event  of  his  death  he  directs  that  all 
benefits  arising  from  his  connection  with  the  association  be 
paid  to  his  wife,  A.  K..,  unless  he  shall  otherwise  order  and 
give  to  the  secretary  of  the  association  ten  days  notice  of  his 
desire."  His  wife,  A.  R.  dying,  the  member  married  S.  A.  R., 
and  afterward  died  intestate  without  children,  leaving  his 
second  wife  surviving  him.  In  construing  this  designation, 
the  court  held,  that  the  language  used  by  the  member  in  desig- 
nating his  first  wife  as  the  beneficiary,  must  be  interpreted  as 
meaning  that  the  first  wife  should  take  the  fund  in  case  she 
survived  him,  and,  as  she  did  not,  her  representatives  were  not 
entitled  to  it.^ 

§  363.  Same  subject  coiitiiiiied.  A  beneficial 
association  to  provide  "  an  endowment  fund  to  be  paid  to  the 
persons  entitled  thereto  "  etc.,  issued  to  one  of  its  members,  a 
certificate  of  insurance  by  which  it  agreed  to  pay  to  his  wife, 
''  or  her  legal  representatives  "  a  certain  sum  within  sixty  days 
after  his  death.  The  wife  died,  and  thereafter,  without  making 
any  change  in  the  beneficiary,  the  member  died.  The  legal 
representatives  of  the  deceased  wife  then  claimed  the  fund. 

The  Supreme  Court  of  the  District  of  Columbia  held  that 
this  contract  of  insurance  was  a  trust;  that  when  the  benefi- 
ciary died,  the  object  of  the  trust  failed,  and  there  was  a  result- 
ing trust  to  the  member;  that  the  case  was  analogous  to  a 
lapsed  legacy,  and  that  the  words  "  or  her  legal  representa- 
tives "  were  of  no  importance,  inasmuch  as  those  persons  would 
have  taken  the  fund  in  succession  and  by  representation,  if  it 

'  Expressmans'  Aid  Society,  v.  *  Masonic  Mutual,  etc.  v.  McAuley, 
Lewis,  9  Mo.  App.  412.  2  Maclcey  (D.  C.)  70. 


Chap.  12,  §264.]  beneficiary,  295 

had  been  vested  in  the  beneiiciarv,  whether  expressly  named  by 
the  member  or  not;  but  since  the  beneficiary's  death  before 
the  member's  prevented  her  ever  taking  any  interest  in  the 
bequest,  it  followed  that  her  executors  or  administrators  could 
take  no  title  thereto; — that  the  fact  that  "her  legal  represen- 
tatives "  were  named  afterwards  did  not  indicate  that  they 
were  to  take  as  beneficiaries  successively  nominated;  that  there 
was  but  a  single  designation,  and  tliat  designation  was  to  the  wife 
alone;  that  the  words  "  legal  representatives,"  as  used  in  the 
certificate,  had  no  signification  different  from  that  which  is 
attributable  to  those  words  generally  —  namely,  persons 
appointed  either  by  will,  or  by  the  law  to  administer  upon  the 
estate  of  a  deceased  person ;  and  that  the  estate  of  the  husband 
was  entitled  to  the  fund. 

This  decision,  written  by  Justice  AVylie  of  the  court,  was 
concurred  in  by  Justice  James,  but  Chief  Justice  Cartter  wrote 
a  dissenting  opinion  in  which  he  held  that  the  contract  of 
insurance  was  to  be  construed  as  any  other  contract,  and  that 
the  doctrine  of  a  lapsed  legacy  did  not  apply  to  such  contracts. 

§  364.  Same  subject  continiiecl.  By  the  consti- 
tution and  by-laws  of  an  association,  members  are  entitled  to 
participate  in  the  benefit  fund  "with  the  right  to  hold,  dispose 
of  and  fully  control  said  benefit  at  all  times." 

A  member  had  issued  to  him  by  the  association  a  certificate 
in  which  he  designated  his  wife  as  liis  beneficiary.  She  died, 
and  afterward  the  member  died  without  having  disposed  of  the 
fund  in  any  manner  after  her  death.  The  court,  in  determin- 
ing whether  her,  or  his  administrator  took  the  fund,  says: 
"  With  this  right  at  all  times  to  hold,  dispose  of  and  control, 
his  mere  designation  of  some  person  to  receive  the  benefit 
would  be  revocable.  It  would  not  prevent  his  subsequently 
designating  some  other  person  to  receive  it.  While,  in  case  of 
his  death  without  having  revoked  his  appointment  of  his  wife, 
she  would  have  been  entitled  to  receive  the  Ijenefit,  yet  during 
his  life,  because  of  the  power  of  revocation,  all  that  she  had  was 
a  mere  exjiectancv,  dependent  on  his  will  and  pleasure.  That 
exi>ectancy  was  not  j^roperty,  not  estate.  The  expectancy  ter- 
minated when  she  died,  and  did  not  pass  to  her  administrator."  ' 

A  certificate  of  membership  provided  for  the  payment  of  a 
certain  sum,  within  thirty  days  after  due  notice  and  satisfactory 
evidence  of  his  death,  to  his  wife,  or  the  legal  representatives 

'  Kiclimond,  Adm'r.  v.  Jolinson,  ton  v.  Jacques  and  Mutual  Life,  28 
Adm'r.  28  Minn.447;     See   Bicker-     lIun{N.Y.)  119. 


296  BENEFICIARY.  [ClIAP.  12,  §266. 

of  the  insured  memher.  The  court  held  that  the  intention  of 
the  assured  was  that  his  wife  should  have  the  proceeds,  in  case 
she  survived  him,  but,  in  case  she  did  not,  such  proceeds  were 
to  o;o  to  his  executor  or  administrator,  to  be  distributed  in  due 
course  of  administration.' 

§  265.  When  beneficiaries  take  eqnally.  Where  a 
benefit  is  granted  to  several  persons,  and  their  respective 
proportions  are  not  specified,  the  beneficiaries  take  equally.* 

Where  a  certificate  of  membership  provides  that  the  benefit 
shall,  at  the  death  of  the  insured,  be  paid  to  his  wife  and  chil- 
dren, such  benefit  is  payable  to  his  wife  and' children  equally. 
In  such  a  case,  the  wife  is  neither  the  inferior  nor  the  superior 
of  her  joint  beneficiaries,  but  is  their  equal,  and  the  beneficiaries 
take  by  virtue  of  the  contract,  not  by  descent.^ 

Where  a  certificate  of  membership  is  made  payable  to  the 
wife  and  children  of  the  member,  each  child  is  entitled  to 
receive  his  proportionate  share  of  the  benefit,  although  one  of 
such  children  may  never  have  lived  witli  his  father  as  a  part 
of  his  father's  family,  and  may  also  have  received  a  portion  of 
his  father's  estate,  prior  to  his  father's  death.  The  court,  in 
thus  deciding,  says:  "  It  must  be  supposed  that  this  grand 
lodge  understood  the  language  which  it  used  in  the  contract, 
and  that  it  intended  to  make  just  the  kind  of  contract  which  it 
did  in  fact  make,  and  that  it  intended  to  bind  itself  to  perform 
just  what  it  agreed  to  perform,  and  did  not  intend  to  be  bound 
by  any  secret  arrangements,  oi-  settlements,  or  understandings 
previously  entered  into,  or  at  any  time  existing  between,  any 
of  the  members  of  the  family.  We  think  this  grand  lodge  is 
simply  bound  to  pay  in  accordance  with  the  terms  of  its  con- 
tract; and  its  contract  says  that  it  shall  pa}'^  the  fund  to  the 
wife  and  children  of  Frederick  (the  member  insured),  which 
according  to  all  well -settled  rules  of  construction  means  the 
wife  and  children  equally."* 

§  266.  Same  snbject  continued.  In  Hallan  v. 
Gardner's  Adm'r.,  5  Ky.  Law.  Rep.,  857,  the  superior  court 
held  that,  when  the  charter  of  a  society  appoints  the  widow 

'  Johnson  et  al.v.  Van  Epps,  110  burn,  83  Ind.,  55;  Hamilton  v.  Pit- 
Ill.  551 ;  14  111.  App.  201.  cher,  53  Mo.,  334;  Cragin  v.  Cragin, 

■'  Wilbiirn  v.Wilburn  et  al,  83  Ind.  66  Me.,  517;  Gould  v.  Emerson,  99 

55 ;  Crockett  v.  Crockett,  2  Philips,  Mass.,  154. 

553;  Allen  V.  Hoyt,  5  Met.,  334.  *  Felix  v.  Grand   Lodsre,  A.  O.  U, 

3  Felix  V.  Grand   Lodge,  A.  O.  U.  W.,  31  Kan.,  81 ;  1  Pac  Rep.  281. 
W.,  31  Kan.,  81 ;    Wilburn  v.  Wil- 


Chap.  12,  §267.]  beneficiary.  297 

and  children  of  the  member  as  his  beneficiaries,  but  does 
not  specify  in  what  proportions  they  shall  take  the  fund 
under  a  certificate  issued  by  it,  they  take  equally. 

But  the  Court  of  Appeals  of  Kentucky  held  otherwise  in  a 
case  involving-  this  point.  Thus,  the  charter  of  the  Kentucky 
Masonic  Mutual  Insurance  Company  provides  that  '"  the  fund 
created  for  the  benefit  of  the  widow  and  children  of  a  deceased 
member  shall  be  paid  to  them,"  but  does  not  declare  in  what 
proportion  each  shall  take.  In  McLin  v.  Calvert,  78  Ky.,  472, 
it  was  held  that  the  statutory  rule  as  to  distribution  of  surplus 
of  personalty  of  an  intestate's  estate  should  obtain  in  the  dis- 
tribution of  a  benefit  fund  derived  from  the  company.  The 
court  says:  "It  is  most  natural  and  reasonable,  as  well  as  just, 
that  when  the  policy  and  charter  fail  to  make  complete  provis- 
ion for  the  distribution  of  the  fund,  the  courts  should  adopt 
the  statutory  rule  for  the  distribution  of  the  surplus  personalty 
of  estates,  and  divide  it  as  they  would  do  if  the  money  was  the 
proceeds  of  a  note  or  bond  held  by  the  decedent.  *  *  *  * 
This  seems  to  us  to  be  not  only  just,  but  what  a  large  part, 
if  not  all,  of  those  who  insure  for  the  benefit  of  their  families, 
would  understand  to  be  the  effect  of  the  contract  made  with 
the  insurance  company;  and  in  laying  down  this  rule,  we 
entertain  little  doubt  that  we  are  doing  just  wJiat  the  insured 
would  have  directed  to  be  done  if  the  question  had  been  pro- 
pounded to  him."  ' 

§  '^66a.  Survivor  of  two  beneficiaries.  Under  a 
certificate  of  a  mutual  benefit  society,  naming  two  persons  as 
beneficiaries,  and  providing  that,  "in  case  of  death  of  either, 
full  amount  to  go  to  the  survivor,  if  living;  if  not  living,  to 
the  heirs  of  said  member,"  if  the  member  dies  first,  the  bene- 
fit fund  vests  in  them  both;  and  if  one  of  the  beneficiaries  dies 
before  payment  of  the  benefit  is  made,  his  share  of  the  fund 
goes  to  his  executor,  not  to  the  survivor,'^ 

§  267.  Aji^reeiiieiit  between  member  and  bene- 
ficiary as  to  fund.  Parol  evidence  is  admissible  to  show 
that  the  desiirnated  beneficiary  of  a  certificate  ]n"omised  the 
member  that,  after  deducting  from  the  benefit  fund  whatever 
sum  of  money  might  be  due  him  from  the  member  at  the 
member's  death,  he  would  pay  the  remainder  to  the  member's 

'See  Continental  Life,  etc.,  v.  Montgomerv,  Midi.,  38  N.  W.  Rep. 
Palmer,  42  Conn.,  GO.  588. 

'•'  Union     Mutual     Aid    Ass'n    v 


298  BENEFICIARY.  [Chap.  12,  §270. 

heirs.  Such  oral  testimony  is  not  in  conflict  with  the  written 
contract  of  insurance.  It  is  offered,  not  to  vary  or  control  the 
contract  between  the  deceased  and  the  society,  but  to  show 
another  and  an  independent  contract  between  the  member  and 
the  beneflciary.  It  is  offered,  not  to  show  that  the  beneflciary 
is  not  to  receive  the  money,  but  to  show  what  he  is  to  do  with 
it  after  receiving  it.' 

§  368.  "  Guardian"  of  meiiiber.  A  subdivision  of 
an  application  was  as  follows:  "Name  and  relationship  of 
person  to  whom  benelit  is  to  be  paid ;  "  (after  which  was  writ- 
ten the  name  of  the  beneficiary,)  Relation;  (after  which  was 
written  the  word  "  guardian."  In  commenting  upon  this  des- 
ignation, the  city  court  of  New  York  says: 

"The  term  'guardian'  after  the  word 'relation'  in  the  appli- 
cation has  no  significance  in  this  case.  The  applicant  was 
twenty-four  years  of  age,  and  in  sound  health  at  the  time  of 
making  the  application.  It  was  known  to  all  that  the  plain- 
tiff could  not  have  been  the  guardian  of  the  applicant  in  the 
legal,  but  rather  in  the  popular  sense  of  that  term,  which 
means  'one  who  guards,  preserves  or  secures.'  (Webster's 
Diet.)  The  plaintiff  kept  a  boarding  house,  and  the  applicant 
boarded  with  her,  and  in  this  limited  sense  'she  guarded,  pre- 
served and  secured'  him.  The  term  as  used  in  the  application 
means  this,  or  nothing.  The  loss  was  payable  to  the  plaintiff, 
and  the  action  was  properly  brought  in  her  individual  name."* 

§  269.  Reformation  of  certificate,  inserting^ 
name  of  beneficiary.  A  certificate  of  membership  in  a 
mutual  benefit  society  maybe  reformed,  after  the  death  of  the 
member,  by  inserting  the  name  of  a  beneficiary,  when  it  ap- 
pears that  the  secretary  of  the  association  and  the  assured 
both  understood  at  the  time  of  the  application,  that  the  pro- 
posed name  should  be  entered  upon  the  record  without  further 
direction,  and  where  it  was  the  duty  of  the  secretary  to  enter 
and  keep  a  record  of  the  beneficiaries.^ 

§370.  Inconii>lete  designation.  The  by-laws  of  a 
society  provided  that  the  members  might  designate  the  per- 
son or  persons  to  whom  pajmient  of  the  benefit  fund  should 
be  made  after  death,  but  made  no  provision  as  to  the  manner 

'  Catland  Ex'r  v.  Hoyt,  Me.,  5  Atl.  '  Scott  v.  Provident  Mutual,  etc. 
Rep.  775.  N.  H. ;  2  New  Eng.  Rep.  286. 

'  Carraher  v.  Insurance  Co  ,  11  N. 
Y.  St.  Reporter  665. 


Chap.  12,  §271.]  beneficiary.  299 

in  which  such  designation  should  be  made.  On  the  back  of 
its  certificates,  however,  it  placed  a  blank  form  in  print,  with 
the  places  designated  for  the  signature  of  the  member  hold- 
ing the  certificate,  and  for  the  name  of  a  witness.  The  court 
held  that  the  placing  of  this  printed  form  in  blank  upon  the 
back  of  the  certificate,  pointed  out  the  manner  in  which  such 
designation  should  be  made,  and  that  where  the  member  had 
merely  filled  up  the  blank,  in  the  form  for  designation  with 
the  names  of  his  three  daughters,  and  had  not  signed  such 
designation,  nor  had  a  witness  sign  it,  the  designation  was  in- 
complete and  invalid.' 

§  371.  Where  no  desigiiatioii  is  made.  A  society 
was  incorporated  under  a  statute,  "  to  aid,  assist  and  support 
members  or  their  families  in  case  of  want,  sickness  or  death," 
which  statute  authorized  it  to  create,  manage  and  disburse  a 
beneficial  fund  sufticieiit  to  pay  all  losses  and  expenses  inci- 
dent to  the  corporation,  for  the  relief  of  members  and  their 
families,  under  such  conditions  and  regulations  as  might  be 
adopted  by  the  grand  lodge;  and  it  was  provided  that  such 
beneficial  fund  might  be  set  apart  "  to  be  paid  over  to  the 
families,  heirs  or  legal  representatives  of  deceased  or  disabled 
members,  or  to  such  person  or  persons  as  such  deceased  member 
may,  while  living,  have  directed;  and  the  collecting,  managing 
and  disbursement  of  the  same,  as  well  as  the  person  or  per- 
sons to  whom,  and  the  manner  and  time  in  which,  the  same 
shall  be  paid  on  the  death  of  a  member,  shall  be  regulated  and 
controlled  by  the  rules  and  by  laws  of  the  said  grand  lodge." 
The  only  by-law  adopted  by  the  society  relating  to  this  sul)- 
ject  provided  that  each  member  of  the  order  should  be  entitled 
to  a  mutual  aid  certificate,  which  should  set  forth  the  name 
and  good  standing  of  the  meml)er,  the  amount  of  benefit  to  be 
paid  at  death,  and  to  whom  payable,  and  that  such  certificate 
should  represent  $2000.00. 

In  an  action  against  the  society  for  the  an.iount  of  the 
benefit  fund,  on  account  of  the  death  of  a  member,  it  did  not 
ap))ear  that  any  certificate  })rovided  for  by  the  by-laws,  above 
referred  to,  was  ever  issued  to  the  deceased  member.  In  hold- 
ing that,  under  these  facts,  there  was  no  contract  of  insurance 
between  the  deceased  member  and  the  society,  the  court  says: 
"  The  lack  of  such  certificate,  we  conceive,  is  fatal  to  tiie 
plaintiff's  action.     The  statute  does  not  designate  tlie  beneti- 

'  Elliott    V.   Whedber,  94    N.    C 
115. 


300  BENEFICIARY.  [ChAP.  12,  §271. 

ciary.  It  describes  certain  classes  of  persons  who  may  be 
made  beneficiaries,  to  wit:  (the  families,  heirs  or  legal  repre- 
sentatives, etc.,  as  above  quoted),  and  it  directs  that  the 
amount  of  the  fund,  and  the  person  or  persons  to  whom  it 
shall  be  paid,  shall  he  regulated'  and  controlled  by  the  rules 
and  by-laws  of  the  lodge.  In  accordance  with  that  direction 
of  the  statute,  the  defendant  has  "regulated  and  controlled" 
the  subject  by  providing  in  its  by-laws  that  the  person  to  whom 
the  fund  shall  be  payable  on  the  death  of  a  member  shall  be 
the  person  named  in  the  mutual  aid  certificate  issued  to  such 
member.  Thus,  by  the  statute  and  the  by-law,  the  designation 
in  the  certificate  gives  the  sole  right  to  the  fund,  and,  without 
such  designation,  it  is  impossible  to  say  that  either,  or  wliich, 
of  the  persons  or  classes  of  persons  mentioned  in  the  fourth 
section  of  the  act  is  entitled  to  the  fund.  Such  designation  is 
made  the  condition  precedent  of  the  defendant's  liability. 
The  trial  court  found  that  the  intestate  was  not  guilty  of 
any  default  or  neglect  of  duty  as  a  member  of  said  order  in 
not  procuring  a  certificate.  That  finding  does  not  aid  the 
plaintiff.  There  is  no  finding  or  evidence  that  the  lack  of  a 
certificate  was  owing  to  any  neglect  or  omission  of  duty  on 
the  part  of  the  defendant.  If  the  intestate  had  applied  to  the 
proper  officer  of  the  defendant  to  issue  a  certificate  designating 
as  the  beneficiary  a  person  named  by  the  intestate,  and  the 
officer  had  unreasonably  refused,  it  may  be  that  the  person  so 
named  would  have  had  a  right  to  recover  on  the  death  of  the 
intestate;  but  that  is  a  question  not  before  us,  and  upon  which 
we  express  no  opinion.  The  respondent's  counsel  contends 
that,  as  there  is  no  evidence  that  the  intestate  procured  a  cer- 
tificate payable  to  any  person  other  than  his  family,  heirs  or 
legal  representatives,  it  is  to  be  presumed,  in  the  absence  of 
proof  to  the  contrary,  that  a  certificate  was  issued  payable  as 
the  statute  provides  it  shall  be  payable.  To  this  there  are  two 
answers.  In  the  first  place,  the  statute  as  we  have  seen,  does  not 
provide  to  whom  the  certificate  shall  be  made  payable,  but 
remits  that  subject  to  the  control  and  regulation  of  the  corpor- 
ation by  its  rules  and  by-laws.  In  the  next  place,  no  presump- 
tion arises  that  the  corporation  issued  a  certificate  to  anyone. 
It  was  under  no  duty  to  do  so,  unless  the  intestate  requested 
it  and  designated  a  person  to  whom  it  should  be  made  pay- 
able, of  which  there  is  no  evidence.  Tlie  charter  and  by-laws 
respecting  the  designation  of  the  person  to  whom  the  benefi- 
ciary fund  shall  be  made  payable,  were  a  part  of  the  contract 


Chap.  12,  §272.]  beneficiary.  301 

with  the  defendant,  which  the  intestate  entered  into  when  he 
became  a  member,  and,  as  their  provisions  have  not  been  com- 
])b'ed  with,  the  defendant  is  not  liable.  The  defense  does  not 
rest,  as  the  respondent's  counsel  seems  to  suppose,  upon  the 
objection  that  the  present  plaintiff  is  not  the  proper  party,  but 
it  stands  upon  the  ground  that  the  defendant  is  not  liable  to 
anyone."  * 

§  373.  Same  subject  continued.  An  association, 
organized  for  "  furnishing  relief  and  assistance  by  means 
of  mutual  agreement  and  payment  of  funds,"  and  "  to  secure 
to  dependent  and  loved  ones  assistance  and  relief  at  the  death 
of  a  member,"  issued  to  a  member  a  certificate  providing  "  that 
a  sum  not  exceeding  $2,000  will  be  paid  by  the  association  as 
a  benefit,  upon  due  notice  of  his  death  and  the  surrender  of 
this  certificate,  to  such  person  or  persons  as  he  may,  by  entry 
on  the  record  book  of  the  association,  or  on  the  face  of  this 
certificate,  direct  the  same  to  be  paid,  provided  he  is  in  good 
standing  when  he  dies."  The  member  died  in  good  standing 
without  designating  a  beneficiary  as  provided,  or  in  any  other 
manner.  Upon  these  facts,  the  court  held  that  the  fund  lapsed 
to  the  society, and  said:  "  The  defendant  promised  to  pay  the 
benefit  to  no  one  save  such  person  or  persons  as  (the  deceased 
member)  should  direct  by  entry  upon  the  certificate  or  record 
book  of  the  association.  By  the  contract,  he  had  the  mere 
power  of  appointing  the  person  who  should  receive  the  benefit. 
He  was  bound  by  tlie  rules  of  the  association,  and  could  not 
change  the  beneficiary  in  a  way  not  in  conformity  with 
them.  *  *  *  *  He  had  no  personal  interest  in  his  mem- 
bership, and  his  personal  representative,  as  such,  can  take  no 
interest  in  it  after  his  death."  ■' 

'  Bishop,  Adin'r'x.  v.  Grand  Lodge  ^  Eastman  v.  Provident  Mutual 
etc.,  43  Hun  (N.  Y.)  472.  Relief  Ass'n.,  62  N.  H. 


CHAPTER  XIII. 


Membership  Pee. 


Sec.  273.    Note  given  for  membership  fee. 

Sec.  274.    Cash  payment  of  fee. 

Sec.  275.    Kecovery  of  membership  fee  from  society. 

Sec.  373.    Note  g-iveii  for  membership  fee.     The 

by-laws  of  some  societies  provide  that  the  membership  fee 
need  not  be  paid  in  cash,  but  that  the  new  member  may  exe- 
cute his  note  for  the  amount,  payable  at  a  certain  time. 

In  such  cases,  the  contract  of  insurance  usually  provides 
that,  if  any  such  note  shall  not  be  paid  when  due,  all  claim 
against  the  society  shall  be  forfeited,  and  the  policy  shall  be 
void.  When  the  contract  of  insurance  makes  such  provision 
for  forfeiture,  the  payment  of  the  note  at  maturity  is  a  condi- 
tion precedent,  and  it  is  for  the  member  to  make  prompt  pay- 
ment. The  society  need  give  no  notice  of  its  election  to  hold 
the  policy  forfeited,  nor  need  it  demand  payment  of  the  note 
at  maturity. 

But  where  the  note  only,  and  not  the  contract  of  insurance, 
makes  provision  for  forfeiture  of  the  policy  upon  its  non-pay- 
ment, the  payment  of  the  note  is  a  condition  subsequent, 
making  the  policy  merely  voidable  at  the  election  of  the  soci- 
ety, and,  in  order  to  forfeit  the  policy  for  non-payment,  the 
society  must  exercise  the  right  of  election  promptly.  It  must 
demand  payment  at  maturity;  if  the  note  is  entitled  to  days 
of  grace,  it  must  demand  payment  on  the  last  day  of  grace, 
during  the  business  hours  of  the  day;  and  if  payment  is  not 
then  made,  it  must  declare  the  policy  forfeited  and  void. 

It  is  not  essential  to  the  declaration  of  forfeiture  that  the 
note  be  returned  to  the  maker  at  once.  The  society  is,  of 
course,  bound  to  return  it,  but  it  may  do  so  during  the  pen- 
dency of  legal  proceedings  contesting  the  forfeiture.' 

Where  a  contract  of  insurance  contains  no  express  stipulation 

'  Maj^  on  Insurance  at  Section  342; 
Bliss  on  Life  Insurance  at  Sections 
182-187. 

(302) 


Chap.  13,  §275.]  membership  fee.  303 

that  the  faihire  to  pay  a  note  given  for  membership  fee,  when 
due,  will  render  the  policy  void,  and,  after  a  note  so  given 
becomes  due,  the  time  of  payment  is  extended  by  the  society, 
and  death  occurs  before  this  time  of  payment  runs  out,  no 
forfeiture  of  the  contract  can  be  declared  for  non-payment  of 
the  note  when  first  due.' 

If  a  society  takes  a  draft  on  a  third  person,  which  is  governed 
by  the  laws  of  commercial  paper,  in  payment  of  an  assessment 
or  membership  fee,  this  implies  an  undertaking  on  its  part  to 
present  the  paper  for  acceptance  or  payment,  and  to  give  the 
necessary  legal  notice  of  refusal  to  accept  or  pay,  the  same  as 
any  other  holder  of  such  paper  must  do;  and  a  failure  to  do  this 
will  save  a  forfeiture  of  the  policy,  although  the  paper  and 
the  policy  itself  contain  an  express  provision  that  the  policy 
shall  be  void  for  any  omission  to  pay  at  maturity  a  note, 
other  obligation,  or  indebtedness  taken  for  any  assessment  or 
membership  fee,  unless  the  neglect  to  make  demand  and  give 
notice  is  excused  by  want  of  funds,  and  the  absence  of  a 
reasonable  expectation  by  the  drawer  of  acceptance  or  payment 
by  the  drawee.^ 

§  374  Cash  payment  of  fee.  Where  an  application 
for  a  certificate  of  membership  declares  on  its  face  that  pay- 
ment of  the  membership  fee  is  a  condition  precedent  to  the 
issuing  of  the  certificate,  the  certificate  is  not  in  force  until 
the  membership  fee  is  actually  paid.  Where  the  prepayment 
of  the  membership  fee  is  made  an  essential  part  of  the  agree- 
ment, no  agent  can  dispense  with  its  requirement.' 

§  375.     Recovery    of     luembership     fee     from 

society.  A  member  of  a  Masonic  lodge,  or  other  society 
not  for  profit,  cannot,  on  his  expulsion,  recover  for  the  initia- 
tion fees  voluntarily  paid  by  him,  when  no  fraud  is  practiced 
on  him.  His  expulsion  does  not  work  a  rescission  of  the  con- 
tract under  which  such  fees  are  paid.* 

'  Kansas    Protective      Union     v.  ^  Ormond  v.  Fidelity  Life  Associa- 

Whitt  et  al.,  Kau.;   14    Pac.   Rep.,  tion,  96  N.  C,  158;  1  S.  E.  Rep.,  7'JO; 

275.  Benefit   Association   v.   Conway,  10 

'^Pendleton    ei    nU     v.   Knicker-  111.  App.  348;  J;  169  a. 

bocker  Life,  etc.,  5  Fed.  Rep.,  238;  *  Robinson   v.  Yates  City  Lodge, 

7  Fed.  Rep.,  169.  etc.,  86  111.,  598. 


CHAPTER  XIV. 


Assessments.— Part  I. 


Sec.  276.  Generally. 

Sec!  278*  C  Assessments  must  be  properly  laid,  and  for  proper  purposes. 

Sec.  279.  Assessmetits  improperly  made  are  not  binding. 

Sec  280.  The  act  of  levying  an  assessment  is  ministerial. 

Sec.  281.  Custom  in  levying  assessments. 

Sec  282.  Assessment  for  reserve  fund. 

Sec  283.  Assessment  made  in  anticipation  of  losses. 

g     ■  288  [  Notice  of  assessment. 

Sk*^'  291   !'  ^^^^  °^  notice  given  by  mail. 
Sec.  292.    Date  of  assessment — date  of  notice. 
Sec.  293.    Notice  by  publication. 
Sec.  294.     Notice  of  date  of  payment. 

Sec   299  \  Insufficiency  of  notice. 

Sec.  376.  Generally.  The  main  feature  of  the  plan  of 
mutual  benelit  insurance  is  that  death  losses  are  to  be  paid  by 
voluntary  contributions  of  the  surviving  members  of  the 
society,  made  upon  a  hxed  and  detinite  plan.  According  to 
this  plan,  the  society,  on  the  death  of  a  member  in  good 
standing,  levies  an  assessment  upon  the  surviving  members. 
A  surviving  member  may  maintain  his  relations  with  the 
society  by  paying  such  assessment  within  the  stipulated  time 
for  its  payment.  J^on-payment  of  the  assessment  within  such 
time  operates  either  to  suspend  the  right  to  benefits,  or  as  a 
resignation  of  his  membership,  and  a  relinquishment  of  all 
clairn  upon  the  society  for  past  contributions  and  future 
beneiits.  An  assessment  under  a  certificate  of  membership  in  the 
nature  of  a  policy  of  insurance,  does  not  make  the  member 
holding  the  certificate  a  debtor  to  the  society,  so  as  to  authorize 
it  to  bring  suit,  in  case  of  neglect  or  refusal  to  pay.  The  obli- 
gatory part  of  the  contract  is  unilateral,  and  on  the  part  of  the 
society ;  payment  of  the  assessment  is  wholly  optional  with 
the  members.  ' 

'  In  re  Protection  Life  Insurance 
Co,9Bissell  188;  A.  O.  U.  W.  v. 
Moore  (Ky.)  9  Ins.  L.  J.  572. 

(304) 


Chap.  14,  §277.]  assessments.  305 

Without  doubt,  this  general  plan  of  insurance  may  be  modi- 
fied by  the  charter,  by-laws,  or  certilicate  of  membership  of  a 
society,  in  many  ways,  and,  among  others,  in  such  a  manner 
as  to  make  the  member  lial)le  for  all  death  losses  or  assess- 
ments made  from  the  issuing  of  the  certificate  until  the  day 
of  its  forfeiture.  When,  by  the  contract,  the  non-payment  of 
an  assessment  at  a  certain  time  operates  as  a  resignation  of  the 
member,  and  when  the  society  is  liable  to  the  member's  bene- 
ficiary upon  its  certificate  until  such  time  as  the  member's  rights 
are  forfeited,  by  reason  thereof ,  there  is  nothing  unjust  in  bind- 
ing the  member  to  pay  all  assessments  or  death  losses  made 
while  he  is  a  member,  and  while  pecuniary  rights  may  accrue 
by  reason  of  his  membership. 

The  Mutual  Benefit  Associates,  by  by-law,  provided  that, 
"  upon  the  death  of  any  member  of  the  association,  it  shall  be 
the  duty  of  the  secretary  to  notify  the  members  of  tlie  same, 
and  thereupon  each  member  shall,  within  thirty  days  after 
such  notification,  pay  to  tlie  secretary  the  amount  required  by 
the  rules  of  the  association."  Another  by-law  provided  that 
if  any  member  should  neglect  to  pay  any  dues  or  assess- 
ments required  by  the  by-laws,  "  then,  and  in  such  case,  such 
membership  shall  cease  and  determine  at  once  without  notice, 
and  all  claims  be  forfeited  to  the  association."  In  constru- 
ing these  provisions  of  the  by-laws,  the  court  held  that 
the  neglect  to  pay  an  assessment  for  thirt}'  days  after 
notice  thereof,  ipso  facto,  determined  the  membership  of  the 
delinquent;  that  the  spirit  and  tenor  of  the  first  by-law  above 
quoted  was  an  agreement  of  the  member  to  pay  any  death 
loss  or  assessment  made  during  the  time  he  should  con- 
tinue a  member  of  the  association;  that  he  was  liable  for  the 
amount  of  all  death  losses  and  assessments  made  prior  to  the 
time  when  he  ceased  to  be  a  member,  and  that,  upon  his 
failure  to  pay,  an  action  would  lie  against  him  therefor.' 

But  because  of  the  small  amount  of  each  assessment,  the 
cost  of  collecting  it,  and  their  widely  scattered  membership, 
such  societies  do  not  ordinarily  seek  to  make  their  delinquent 
members  liable  for  assessments,  under  any  circumstances,  but 
make  rigid  provision  for  forfeiture  in  case  of  non-]>ay- 
ment, 

§  377.    Assessnients  iiui.st  be  properly  laid,  and 

for  proi)er  purposes.    Assessments  must  be  legally  made, 

'  ^Ic Donald     v.    Ross-Lewin,    29 
Iliin  87.     See  §351,  352,  353. 


306  ASSESSMENTS.  [Chap.  14,  §278. 


in  order  that  the  faihire  of  a  member  to  pay  tliem  shall  work 
a  forfeiture  of  his  rights  of  membershij).  They  can  only  be 
valid  when  laid  under  the  conditions  stated  in  the  charter 
and  by-laws,  and  for  the  jnirposes  named  therein.  They  must 
be  made  in  strict  conformity  with  the  authoritv  given  to  the 
society  in  the  charter  and  by-laws,  and  in  accordance  with  the 
contract  of  insurance.'  Even  a  more  equitable  mode  than  that 
provided  for  may  not  be  adopted.  Where  the  charter  author- 
izes the  directors  to  make  an  assessment,  it  can  be  made  only 
by  them.  Where  the  laws  of  the  society  authorize  directors 
to  make  assessments,  they  have  no  arbitrary  discretion  in  the 
matter,  but  are  controlled  by  the  explicit  provisions  of  the 
powers  delegated  to* them;  and  assessments  may  not  be  made 
•  unless  the  necessity  therefor  properly  and  legally  arises.'  The 
requirements  of  the  by-laws  of  a  mutual  benefit  society,  that 
all  assessments  shall  be  made  by  the  board  of  directors,  and 
that  the  chairman  shall  approve  all  proofs  of  death,  are  satis- 
fied when  the  secretary  and  treasurer  submits  a  notice  of  death 
to  a  meeting  of  the  board  which  directs  that  its  chairman 
shall  examine  the  proofs  Avhen  they  shall  arrive,  and,  if  found 
correct,  the  secretary  shall  issue  notices  of  assessment 
thereon.' 

When  the  assessment  is  authorized  and  required  to  be  made 
by  the  directors  of  the  society,  it  is  not  invalid  because  the 
directors  who  made  it  were  personally  interested  therein  as 
members  of  the  society;  nor  because  one  director  was  absent 
when  it  was  made.''  Where  the  charter  gives  to  the  directors 
of  a  society  power  to  levy  assessments  upon  its  members  to 
pay  losses,  an  assessment  made  by  a  minority  of  the  directors 
is  invalid.  And  the  fact  that  the  majority  of  the  directors 
appointed  the  minority  as  a  committee  to  make  the  assessment, 
does  not  make  such  assessment  valid.^  When  the  by-laws  so 
provide,  the  board  of  directors  must  levy  the  assessment.'' 

§  378.  Same  subject  continued.  The  liability  of 
the  member  is  conditional,  and  depends  upon  the  contingency 

'Aonew    V.  A.   O.   U.  W.  17  Mo.  *  Williams  v.  German  Mutual  etc., 

App.  254;  Susquehanna  Mutual  etc.  68  111.387. 

Gackenbach  (Pa.);  9  Atl.  Rep.  90.  f"  Monmouth    M.  F.    Ins.    Co.    v. 

■2  Thomas    v.   Whallon,    31    I'.arb.  Lowell,  59  Me.  504. 

178  •   Pacific  Mutual  etc.  v.  Guse,  49  ^  Farmers'  Mutual  etc.    v.    Chase, 

Mo.' 332.  56N.H.341. 

3  Passenger  Conductor's  etc.  v. 
Birnbaun,  116  Pa.  St.  565;  11  Atl. 
Rep.  378. 


Chap.  14,  §279.]  assessments.  307 

of  death  losses,  and  the  incurring  of  expenses,  to  which  he 
shall  be  liable  to  contribute;  which  liave  been  duly  ascertained 
by  the  proper  officers;  and  which  make  necessary  a  resort  to  an 
assessment  upon  the  certificate.  The  promise  of  the  member 
is  to  pay,  or  forfeit  his  membership,  upon  such  conditions, 
and  the  existence  of  these  conditions  must  be  established 
affirmatively  before  a  levy  of  an  assessment  is  valid  and  bind- 
ing. An  assessment  made  in  good  faith,  upon  correct  princi- 
ples, and  substantially  correct,  is  binding.'  All  assessments 
made  pursuant  to  the  charter  and  by-laws,  or  to  the  constitu- 
tion and  by-laws,  are  iwiina  facie  reasonable  and  valid.  The 
right  to  levy  assessments  or  dues  upon  members  of  the  society, 
is  governed,  to  some  extent  at  least,  by  the  occasion  for  them.'' 

The  levying  of  assessments  at  the  regular  meeting  of  the 
directors,  or  other  proper  officers,  is  presumably  a  part  of  the 
business  of  the  society,  and  no  notice  of  an  intention  to 
make  an  assessment  is  necessary,  unless  required  by  the  char- 
ter or  by-laws.  The  by-laws  may  authorize  the  proper  officers 
to  lay  an  assessment  at  a  meeting  called  for  that  purpose.' 

Where  a  table  of  rates  of  assessment  has  been  published  by 
a  society,  and  is  made  a  part  of  the  contract  of  insurance,  the 
assessment  must  be  made  in  strict  conformity  with  the  pre- 
scribed table,  and  the  board  of  directors  has  no  power  to  change 
these  rates  without  the  consent  of  the  insured  member.* 

§  279.  Assessments  improperly  made  are  not 
binding'.  A  society  organized  as  a  corporation  under  the 
laws  of  a  state  cannot  subject  itself  or  its  members  to  the  jur- 
isdiction of  an  authority  existing  outside  of  the  state  and 
beyond  the  control  of  its  laws. 

A  grand  lodge  of  the  Ancient  Order  of  United  Workmen, 
incorporated  under  the  laws  of  the  state  of  Michigan,  cannot 
compel  its  members  to  pay  assessments  made  under  the  orders 
of  a  supreme  lodge  incorporated  under  the  laws  of  Kentucky, 
and  not  subject  to  tlie  C(^urts  of  Michigan;  nor  can  it  suspend 
members  from  their  ])rivi leges,  as  such,  for  refusing  to  pay  such 
an  assessment.     In  discussing  this  subject  the  court  says: 

"The  relator  is  not  liable  to  pay  the  assessment.     It  is  not 

'  Marblehead   Ins.  Co.   v.  Under-  ^  Ins.  Co.  v.  S;nvj-or,  12  Cush.  64; 

wood,  3  Gray  210.  Fayette   Mut.     v.     Fuller,  8  Allen 

*  Pulford  V.  Fire  Department  etc.  (Ma.ss.)  27. 

31  Mich.  458;    Hiberuia  etc.  Co.  v.  *  York   County   Mutual   Aid    etc. 

Harrison,  93  Pa.  St.  204;  Rosenber-  v.  Myers,  11  Weekly  Notes  of  Cases, 

ircr  V.  Washinu:ton  Fire  Ins.   Co.  87  541. 
Pa.  St.  207. 


308  ASSESSMENTS.  [Chap.  14,  §280. 

competent  for  the  respondent  to  subject  itself,  or  its  members, 
to  a  foreign  authority  in  this  way.  There  is  no  law  of  the 
state  permitting  it,  nor  could  there  be  any  law  of  the  state 
which  would  subject  a  corporation  created  and  existing  under 
the  laws  of  this  state  to  the  jurisdiction  and  control  of  a  body 
existing  in  another  state,  and  in  no  manner  under  the  control 
of  our  law.  The  attempt  of  the  respondent  to  do  this  is  an 
attempt  to  set  aside  and  ignore  the  very  law  of  its  being."  ' 

An  assessment  to  pay  losses  and  expenses,  where  the  charter 
authorizes  an  assessment  only  to  pay  losses,  is  invalid.^  A  vote 
to  inake  an  assessment,  leaving  the  amount  in  blank,  is  invalid.^ 
An  assessment  is  not  invalid,  and  cannot  be  resisted  on  the 
ground  that  payment  of  the  claim  for  which  the  assessment  is 
made,  might  have  been  successfully  resisted  on  technical 
grounds,  and  ought  not  to  have  been  favorably  passed  upon  by 
the  board  of  directors.^ 

An  assessment  laid  on  all  the  members  of  a  mutual  benefit 
society  to  pay  liabilities  for  losses  and  expenses,  part  of  which 
accrued  before  some  of  them  became  members,  is  valid  as  to 
the  old  members,  but  void  as  to  the  new  ones,  unless  the  con- 
tract of  insurance  provides  for  the  payment  of  all  assessments 
that  may  be  levied  after  the  issue  of  the  certificate  to  the 
member,  and  does  not  limit  the  liability  of  new  members  to 
such  losses  and  expenses  as  may  thereafter  accrue." 

Where  the  laws  of  the  society  require  that  an  assessment 
shall  be  levied  without  delay,  on  the  death  of  a  member,  a 
prolonged  delay  will  not  necessarily  vitiate  the  assessment 
when  made.  The  circumstances  attending  the  delay, — a  con- 
troverted liability  upon  the  certificate,  a  litigation  to  determine 
the  rights  of  the  parties  thereunder,  and  similar  matters,  may 
be  shown  as  an  excuse  for  the  delay  in  levying  the  assessment." 

§  380.  The  act  of  levying"  an  assessment  is 
ministerial.  In  making  assessments  upon  its  members,  a  so- 
ciety acts  in  a  ministerial,  not  in  a  judicial,  capacity.  No- 
presumption,  therefore,  arises  in  favor  of  the  regularity  or 
legality  of  its  assessment.      Every  fact  authorizing  an  assess- 

'  Lamphere  v.   United  Workman  *  Sands  v.   Hill,  43  Barb.  N.  Y.) 

47  Mich.  429;  See   State  ex  rel.    v.  651. 

Miller,  66  Iowa  26;  23  N.   W.  Rep.  *  Ins.  Co.  v.  Houghton.  6  Gray  77; 

241.  Roswell  v.  Equitable  Aid  Union,  13 

^  Bersch  v.   Sinnissippi  Ins.   Co.  Fed.  Rep.  840. 

82  Ind.  64.  «  People's  Ins.  Co.   v.  Allen  et  al. 

3   Mutual   Ins.  Co.    v.     Paige,   1  10  Gray  297. 
Hilton  (N.  y.)  430. 


Chap.  14,  §282,]  assessments.  309 

ment  to  be  made  must  exist,  and  everj  act  required  of  the  so- 
ciety must  be  performed,  before  an  assessment  can  be  levied, 
which  a  member  must  pay,  or  forfeit  his  rights  of  member- 
ship.' It  may  be  stated,  as  a  general  proposition,  that  when  a 
society  relies  upon  the  failure  of  a  member  to  pay  an  assessment 
as  a  forfeiture  of  his  membership  and  the  benefits  thereof,  it 
must  show  affirmatively — both  in  pleading,  and  in  evidence 
at  the  trial — that  the  assessment  was  made  by  the  proper  au- 
thority, for  a  proper  purpose,  in  the  manner  indicated  in  the 
source  from  which  it  derives  its  power  to  make  the  assess- 
ment, and  in  accordance  with  the  contract  of  insurance.  An 
averment  that  the  assessment  was  "  duly  made  "  is  insufficient.'^ 
The  charter,  by-laws,  or  contract  of  insurance  may  make 
the  records  of  a  society  levying  an  a.ss,es,&mentm'inia  facie 
evidence  of  the  legality  of  the  assessment  laid.  Iii  such  case, 
the  mere  introduction  of  the  records,  or  a  properly  certified 
copy  thei-eof,  showing  the  levy  of  an  assessment  upon  its 
members,  and  proof  of  the  non-payment  thereof,  will 
cast  upon  the  party  suing  upon  the  contract  of  insurance  the 
burden  of  showing  that  because  of  some  act  or  omission  of  the 
society,  the  assessment  is  invalid,  or  that  the  purpose  of  the 
assessment  is  illegal,'  The  law  or  contract  may  also  provide 
that  the  record  of  losses  kept  by  the  society  shall  be  prwia 
facie  evidence  that  such  losses  have  occurred," 

§  281  Custom  in  levying"  assessments.  Where 
the  pretended  assessment  has  not  been  made  in  accordance 
with  the  provisions  of  the  constitution  of  the  society,  it  is  in- 
competent to  show  that  it  was  made  in  accordance  with  the 
custom  of  the  society,  unless  it  is  further  shown  that  the  mem- 
ber who  failed  to  pay  such  pretended  assessment  had  knowledge 
of  such  custom.* 

§  283.  Assessment  for  reserve  fund,  etc.  The  society 
stands  in  the  relation  of  agent  and  quasi  trustee  for  its  mem- 
bers, and,  as  such,  it  is  burdened  with  certain  duties.  It  is 
obviously  the  duty  of  the  officers  of  the  society  to  observe  and 
perform  with  care  all  the  requirements  of  the  laws,  rules  and 

'  American  Mut.,  etc.  v.  Helburn,  *  Peoples'  Ins.  Co.  v.  Allen  et  al.i 

Ky.,  2  S.  W,  Rei).  495.  10  Gray  297;    Susquehanna  Mutual 

■^  American  Mut.,  etc.,  v.  Ilelburn,  etc.,  v.  Gackenbach,  Pa.,  9  Atl.  Rep., 

Ky.,  2  SW.  Rep.  496;    Mut.  Ins.  Co.  90. 

V.  HouLchton,  6  Gray  77.  '  Underwood  v.  Iowa  Legion  of 

^  Wiiiiains  v.  German  Mutual,  etc.  Honor,  66  Iowa  134. 
68  111.  3b7. 


310  ASSESSMENTS.  [Chap.  14,  §282. 

regulations  of  the  society,  and  the  provisions  of  the  certificate 
of  memV)ership,  relative  to  the  levying  of  an  assessment,  so 
that,  whether  the  burden  of  proof  in  the  matter  be  upon  the 
society  or  its  adversary,  in  a  legal  proceeding,  it  can  easily  and 
certainly  be  shown  that  they  have  done  all  that  the  society  has 
by  law  or  contract,  been  required  to  do  and  perform,  and  that 
the  assessment  is  for  a  proper  purpose. 

An  assessment  for  an  improper  and  unnecessary  purpose  is 
invalid,  but,  in  determining  what  are  proper  and  necessary  pur- 
poses for  wdiich  a  mutual  benefit  society  may  levy  an  assessment, 
the  laws  and  contracts  governing  the  society  should  receive  a 
liberal  construction.  Where  such  a  society  is  not  inhibited  by 
its  charter,  it  undoubtedly  has  a  right  to  provide,  in  its  by-laws 
and  contracts,  for  the  accumulation  of  a  reserve  fund.  While 
it  is  not  intended  that  such  associations  shall  become  great 
financial  institutions  with  growing  accumulations  and  hold- 
ings of  large  sums  of  money  and  investment  securities,  it  is  still 
proper  that  they  should  strengthen  their  financial  ability  to 
pay  large  losses  in  unusual  emergencies.  The  legislatures  of 
several  states,  recognizing  the  propriety  of  a  reserve  fund  in 
such  societies,  have  passed  laws  providing  for  such  a  fund,  and 
regulating  its  management,  investment  and  disposition.  Cer- 
tainly, no  just  reason  presents  itself  why  such  societies  should 
not  be  permitted  to  hold  a  reserve  or  guarantee  fund  for  the 
protection  of  its  members. 

The  board  of  directors,  or  other  officers  charged  with  the 
management  of  the  affairs  of  a  society,  must,  of  necessity,  be 
Dermitted  to  exercise  their  discretion  to  a  great  extent  in  the 
management  of  the  reserve  fund;  and  where  such  fund  has  not 
exceeded  any  limit  which  the  law  may  have  placed  upon  the 
amount  that  may  be  held  as  a  reserve,  it  must  be  left  to  the 
discretion  of  such  officers,  whether  they  will  pay  a  loss,  in 
whole  or  in  part,  from  this  fund,  or  levy  an  assessment  upon  the 
members  to  pay  it.  The  idea  of  a  reserve  fund  imports  per- 
manency to  some  extent,  and  if  losses  were  required  to  be  paid 
out  of  this  fund,  as  they  occurred,  the  fund  would  soon  be 
depleted  and  destroyed,  and  the  very  object  for  which  it  was 
created  would  be  defeated.  A  member  cannot,  therefore, 
insist  that  the  amount  of  money  held  in  the  reserve  fund 
shall  be  applied  to  the  payment  of  losses,  before  he  be  required 
to  pay  his  assessment.  The  officers  of  the  society  may  use  a 
part  or  all  of  the  fund  to  pay  death  losses,  but  they  cannot  be 


Chap.  14,  §284.]  assessments.  311 

compelled  to  do  so.  It  is  in  their  discretion  to  hold  the  reserve 
fund,  and  lay  an  assessment  to  pay  the  loss.' 

§  '^83.    Assessment  in  anticipation  of  losses.     In 

order  to  determine  whether  assessments  may  be  made  in 
advance,  and  in  anticipation  of  losses,  it  is  necessary  to  look  to 
the  provisions  of  the  contract  of  insurance — the  charter,  by- 
laws and  certificate  of  membership.  Where  the  contract 
provides  that,  upon  the  death  of  a  member,  the  directors  shall 
examine  into  the  loss,  and,  if  they  shall  find  tlie  claim  of  the 
beneficiary  of  the  member  to  be  valid  against  the  society,  they 
shall  levy  an  assessment  upon  the  members  to  pay  the  claim, 
no  assessment  may  be  made  in  anticipation  of  losses.^ 

§384.  Notice  of  assessment.  In  beneficiary  associa- 
tions, where  the  time  and  frequency  of  payments  depend  on  the 
mortality  of  members,  and  payment  is  to  be  made  only  upon 
notice  that  an  assessment  is  required,  no  liability  is  imposed 
on  a  subordinate  lodge,  or  a  member  of  the  society,  until  due 
notice,  in  conformity  with  the  laws  of  the  order  or  society,  is 
given.  The  giving  of  notice  is  a  condition  precedent,  and  good 
standing  is  not  lost  by  a  failure  to  pay  an  assessment  of  which 
no  notice  was  given,  through  the  fault  or  misconduct  of  a 
supreme  lodge  or  society,  or  its  officers.' 

The  giving  of  the  notice  being  a  condition  precedent  to  the 
accrual  of  a  member's  liability,  the  facts  showing  that  the 
notice  provided  l)y  the  charter,  or  contract  of  insurance  has 
been  given,  should  be  set  out  in  pleading,  and  proved  at  the 
trial,  and  an  averment  that  legal  notice  of  the  assessment 
was  duly  given,  is  a  conclusion  of  law  and  insufficient.* 

Where  the  only  means  which  a  suliordinate  lodge,  or  a 
member  of  a  benefit  association  has  of  knowing  when  an 
assessment  is  due  to  the  order  or  association,  is  by  a  notice 
from  the  supreme  lodge  or  governing  body,  unless  notice  is 
given,  no  rights  are  lost.     When,  in  the  contract,  a  notice  is 

'  Grossman   v.   Mass.    Mut.,    etc.,  Sup.  Lodge  K.  of  H-,  24  Fed.  Kep.. 

Mass.,  9  N.  E.,  Rep.    753.    See  i^  i^  450;  Agiiew  v.  A.  O.  U.  W.,    17  Mo. 

133,134.  App.,  254;   Castner  v.  Farmer's  Ins. 

•'Thomas    v.    Whallon,   31  Barb  Co.,  Mich.,  15  N.  W.  Rep.  452;  Bates 

(N.Y.),  173;  Ins.  Co.  V.   Schmidt,  19  v.  Mut.    Ben,  etc.,   47    Mich.,    04(5; 

Iowa,   502;  Pacific     Mut.,     (-tc,  v.  Gellatly  v.  Mut.  Ben,  etc.,  27  Minn  , 

Guse,  49  Mo..  329;   Ro.senber2:er  v.  215;  (fN.  W.    Rep.   627;   Covenant 

Wasliington   Fire   Ins.  Co.,  87   Pa.  Mut.,  etc.,  v.  Spies,  114  111..  403. 
St..  207.  ••  Coyle    v.   Kentucky     Grangers, 

3  Farrie    v.  Supreme  Council,  15  etc.,  K}'.,  2  S.  W.  Rep.  676. 
N.   Y.   St.,  Reporter,  155;    Hall  v. 


312  ASSESSMENTS.  '    [ClTAP.  14,  §'2S5. 

provided  for,  and  not  given,  no  tender  of  the  amount  of  any 
assessment  is  necessary  in  order  to  j^revent  a  forfeiture  of 
meml)ersliip.  A  member  is  entitled  to  notice  of  an  assess- 
ment, before  he  can  be  declared  in  default  for  its  non-pay- 
ment. ' 

Although  the  charter  provides  for  a  forfeiture  where  the 
member  has  failed  to  pay  within  thirty  days  after  notice  has 
been  "  served  on  him  or  sent  to  him,"  the  time  does  not  begin 
to  run  until  he  has  had  actual  notice.  An  allegation  by  the 
society  that  "  it  sent  him  notice"  on  a  certain  day,  and  that 
"  he  received  the  same,"  does  not  allege  the  time  at  which  he 
received  the  notice,  and  is,  therefore,  not  sufficient  to  show 
that  there  was  a  forfeiture.^ 

§385.  Notice  Continued.  Where  notice  through  the 
mails  is  relied  on,  it  must  clearly  be  shown,  both  in  pleading 
and  evidence,  that  the  communication  was  placed  in  the 
post-office,  properly  directed,  and  stamped  according  to  law.^ 
Where  such  notice  is  relied  on,  it  is  not  sufficient  to  show 
that  three  persons,  members  of  the  same  family,  were  also 
members  of  the  society,  and  that  three  notices  were  placed 
in  one  envelope,  and  directed  to  one  of  the  other  three 
members  of  the  family."  Where  the  by-laws  of  a  society 
provide  for  notice  of  assessments  due,  before  there  shall  be  a 
forfeiture  of  benefits,  notice  mailed  to  a  member  is  not 
sufficient  to  sustain  a  forfeiture  without  proof  that  it  reached 
him.^  AVhere  a  party  is  entitled  to  notice,  and  has  not 
stipulated  to  have  it  transmitted  by  mail  or  otherwise,  he  is 
not  bound  by  any  notice  until  it  is  actually  received  by  him." 
Where  the  contract  of  insurance  provides  that  a  notice  of 
assessment  shall  be  transmitted  by  mail  by  the  society  to  the 
member,  a  change  of  residence,  not  made  known  to  the  society, 
is  without  effect  upon  it.  The  society  has  performed  its  duty 
when  it  has  sent  a  notice  of  assessment  to  the  address  of  the 
member,  as  made  known  to  it.'' 

Notice  of  assessment  should  not  be  given  until  the  assess- 

'  Hall  V.  Supreme  Lodge,  24  Fed.  ^  McCorkle  v.  Texas  Ben.  Ass'n., 

Rep,  450;    Covenant  Mut,  etc.,   v.  Texas.  8  8.  W.  Rep.,  516. 

Spies.  114  111.,  463.  °  McCorkle  v.  Texas  Ben.  Ass'n., 

^  American  Mutual  Aid  Society  v.  supra ;   Durhaus  v.  Corey,  17  Mich., 

Quire,  Ky. ;  8  Ky.  L.  Rep.,  101.  282;  Castner  v.     Farmers'   Mutual, 

^  Haskins  v.  Kv-,  Granger's   Mut.  etc.,  50  Mich.,  273. 

Ben.   Society,  7  Ky.,  Law  Rep.  371.  '  Lothrop  v.  Greenfield,  etc.,  Ins. 

■*  Garretson  v.  Equitable    Mutual,  Co.,  2  Allen  (Mass.),  82. 
etc.,  Iowa;  38  N.  W.  Rep.,  127. 


Chap.  14,  §286.]  assessments.  313 

ment  has  been  made.'  If  the  assessment  be  properly  levied, 
but  no  proper  notice  thereof  be  given,  no  forfeiture  is  incurred 
by  failure  to  pay  it.^  Notice  from  the  secretary  of  a  mutual 
benefit  society  is  notice  from  the  society,  and  the  society  is 
bound  by  the  act.^  In  the  absence  of  any  agreement  of  the 
member,  or  any  provision  in  the  charter  or  by-laws,  for  a  dif- 
ferent mode  of  service,  it  should  be  made  personally,  as 
required  at  common  law,  where  the  object  is  to  deprive  a  party 
of  his  rights  or  property;  or  if  that  can  be  dispensed  with, 
then  in  such  other  mode  as  will  be  most  likely  to  effect  its 
object.*  Unless  some  special  mode  or  form  of  notice  of  an 
assessment  be  required  by  the  charter,  or  contract,  personal 
service  will  be  sufficient.'* 

§  286.  Notice  continued.  In  suits  upon  a  certili- 
cate  of  membership  in  a  mutual  benefit  society,  the  contro- 
versy frequently  turns  upon  the  question  whether  the  deceased 
member  was  so  notified  or  informed  of  the  assessment  as  to 
incur  a  forfeiture  by  reason  of  its  non-payment.  The  notice 
given,  in  order  to  have  such  an  effect,  must  be  shown  to  have 
substantially  followed,  in  its  form  and  manner  of  service,  the 
rules  prescribed  in  the  contract  of  insurance.  It  is  often  in- 
sisted, however,  that  it  is  sufficient  if  it  appear  from  the 
evidence  that  the  deceased  member  had  knowledge  of  the 
assessment,  derived  from  any  source,  or  that  he  had  such  a 
knowledge  as  should  have  put  him  upon  inquiry  about  it. 
This  doctrine  is  not  tenable.  In  discussing  this  question,  the 
court  of  appeals  of  the  state  of  Missouri  says: 

"  There  are  many  cases  where  a  person  must,  at  his  peril, 
act  upon  the  knowledge  of  a  particular  fact,  however  derived, 
or  upon  such  information  as  should  reasonably  put  him  upon 
inquiry.  But  wherever  the  special  law  of  the  notice  prescribes 
the  form  and  manner  in  which  it  is  to  be  given,  especially 
when  a  forfeiture  may  result,  the  party  to  be  affected  will,  as 
a  general  rule,  not  be  bound  by  a  notice  given  in  any  other 
form  or  manner.  Thus,  when  a  man's  rights  are  to  be  adjud- 
icated in  a  court  of  justice,  he  is  entitled  to  just  the  form, 
manner,  and  time  of  notice  that  are  directed  by  the  statute; 
otherwise  he  will  not  be  bound  by  the  proceedings,  although 

'  Bangs  V.  Mcintosh,  23  Barb.  (N.  •*  Wachtel  v.  Widows  and  Orphans 

Y.)  591.  Soc.  84  N.  Y.  28. 

^  Frey  v.  Mutual  Ins.  Co.  43  U.  C.  » Jones  v.  Sisson,  6  Grav  28S ;  York 

(q.  B.)  102.  County  Mutual  v.  Knight,  48  Me.  75 ; 

^Olmstead  V.  Farmers' Mutual  etc.  Williams  v.  German  Mutual  etc.  68 

50  Mich.  200.  111.  387. 


314:  ASSESSMENTS.  [Chap.  14,  §287 

bodily  present  in  the  court  room,  seeing  and  hearing  all  that 
may  be  done.  The  endorser  of  a  promissory  note  may  have 
personal  knowledge  of  the  maker's  intention  not  to  pay,  or  of 
his  failure  to  pay,  at  maturity.  Yet  the  holder  cannot  sub- 
ject him  to  any  liability,  without  a  notice  of  the  dishonor, 
given  in  the  form,  time,  and  manner  established  by  commercial 
law  and  usage.  (The  member)  might  have  heard  a  rumor,  or 
have  been  informed  by  a  friend,  that  assessment  number  72 
had  been  declared,  and  mnst  be  ])aid  by  a  certain  time.  But 
she  had  a  right  to  disbelieve  the  rumor,  or  the  friend,  until  a 
knowledge  of  the  fact  was  brought  home  to  her  in  the  way  for 
which  she  had  stipulated  in  her  contract  with  the  associa- 
tion." ■ 

Where  it  is  shown  that  a  deceased  member  of  such  a  society 
knew  of  the  assessment  made  upon  the  members,  and  expressed 
his  intention  of  paying  his  assessment,  these  are  facts  from 
which  the  jury  may,  but  are  not  bound  to,  infer  that  he  was 
properly  notihed.^ 

The  object  of  stipulations  as  to  the  form  and  manner  of 
service  of  notice  of  assessment  is  to  point  out  to  the  member 
the  way  in  which  he  is  to  expect  the  notice,  and  to  protect 
him  in  his  right  to  hav^e  knowledge  and  information  of  the 
time  when,  and  amount  which,  he  will  be  required  to  pay. 
The  member  may  waive  compliance  with  these  purely  techni- 
cal requirements,  and  if  he  actually  receives,  without  objec- 
tion, the  notice  to  which  he  is  entitled,  and  acknowledges  the 
receipt  of  the  notice,  or  in  any  way  acts  upon  it,  but  does  not 
pay  the  assessment,  he  waives  the  right  to  service  in  the  man- 
ner and  form  as  agreed  upon  in  the  contract. 

§  387.  Notice  continued.  A  by-law  of  a  society 
provided:  " If  the  insured  shall  neglect  for  the  space  of  ten 
days,  when  personally  called  on,  or  after  notice  in  wi-iting  has 
been  left  at  his  last  and  usual  place  of  abode  or  business,  to  pay 
an  assessment,  the  risk  of  the  company  on  the  policy  shall  be 
suspended  until  the  same  is  paid."  A  member  was  not  per- 
sonally called  on  for  an  assessment,  and  a  notice  in  writing 
was  not  left  at  his  last  and  usual  place  of  abode  or  business, 
but  he  received  a  notice  by  mail,  and  had  some  correspondence 
with  the  society  about  the  assessment.  He  did  not  pay  the 
assessment,  but  made  no  objection  to  the  way  in  which  the  notice 
reached  him.    In  an  action  on  the  contract  of  insurance,  it  was 

•  Siebert  v.  Chosen  Friends,  23  ''  Siebert  v.  Chosen  Friends, 
Mo.  App.  268.  supra. 


Chap.  14,  §288.]  assessments.  315 

held  tliat  any  objection  to  the  manner  of  receiving  the  notice, 
must  be  deemed  to  have  been  waived  by  the  member.'  Upon  this 
subject,  the  court  says:  "  The  object  of  this  provision  in  the  by- 
law is  to  bring  the  notice  of  an  assessment  to  the  knowledge 
of  the  insured.  But  this  may  be  waived,  and  it  does  not  pre- 
clude other  methods  of  communication,  provided  the  purpose 
of  the  by-law  in  this  regard  is  accomplished.  The  objection 
now  for  the  first  time  made  is  purely  technical,  and  as  he  act- 
ually received  the  notice  to  which  he  was  entitled,  without 
objection,  he  has  been  in  no  way  injured  by  this  departure 
from  the  by-law,  and  he  cannot  avail  himself  of  it." 

Fi'om  the  authorities  the  doctrine  is  fairly  deducible,  that  a 
member  does  not,  by  receiving  and  retaining  a  notice  of  an 
assessment,  waive  any  objection  to  its  sufficiency  under  the 
contract  of  insurance;  but  that  he  does  waive  the  question  as 
to  the  sufficiency  of  the  service  of  a  proper  notice  upon  him, 
by  receiving  it  by  some  other  method  of  communication  than 
that  agreed  upon,  acting  upon  it,  and  retaining  it  beyond  a 
time  when  he  might  reasonably  call  the  attention  of  the  society 
to  the  irregularity  and  insufficiency  of  the  service. 

When  the  evidence  is  conflicting  concernino:  the  service  of 
notice  upon  a  member,  it  is  for  the  jury  to  decide  whether  or 
not  such  service  was  made  upon  him.'' 

When,  by  the  terms  of  a  contract  of  insurance,  an  assessment 
is  payable  at  a  certain  time,  "  or  within  thirty  days  thereafter 
during  the  continuance  of  this  certilicate,"  there  can  be  no 
forfeiture  for  non-payment  until  after  the  expiration  of  the 
thirty  days;  and  if  the  member  dies  after  the  certain  time 
fixed,  but  before  the  expiration  of  the  "  thirty  days  thereafter," 
the  society  is  liable.'  This  is  not  the  case  of  the  death  of  an 
insured  after  the  premium  was  due,  and  within  the  days  of 
grace.  In  such  case,  it  is  settled  that  the  insured  can  only  take 
advantage  of  the  days  of  grace  at  his  own  risk,  and  if  he  dies 
before  actual  payment,  his  beneficiary  cannot  recover. 

§  288.  Notice  coiitiiiuod.  Where  the  condition  of  a 
certificate  of  membership  is,  tliat  the  assured  shall,  within 
thirty  days  from  the  date  of  notice,  pay  an  assessment  against 
him,  and  a  failure  to  do  so  shall  render  the  certificate  void,  if 
the  member  dies  within  thirty  days  after  receiving  notice  of  an 

'  Hollister    v.    Quincy   Insurance        ^  Roirers    v.    Capitol   Life   etc.,  1 

Co.,  118  Mass.  478.  Weekly  Notes  of  Cases  588:  Baker 

'-'  Buckley    v.    Columbia  Ins.  Co.,  v.  N.  Y.  St.  Mutual  etc.,  27  N.  Y. 

83  Pa.  St.  298.  Weekly  Dig.  91 ;  See  ^845. 


316  ASSESSMENTS.  [Chap.  14,  §2S9. 

assessment,  the  society  will  have  no  right  to  declare  a  forfeiture 
for  non-payment  within  the  thirty  days.' 

Where  a  member  is  to  make  payment  of  an  assessment 
within  thirty  days  from  date  of  notice  thereof,  the  day  on  which 
he  receives  the  notice  will  be  excluded. 2 

A  section  of  the  charter  of  the  National  Mutual  Benefit 
Association  provided  that  "any  member  failing  to  pay  his 
assessment  within  thirty  days  from  the  date  of  the  notice, 
shall  forfeit  his  membership,  etc."  In  a  suit  upon  one  of 
its  conti-acts,  it  was  shown  that  notice  of  the  assessment 
was  received  by  the  member  on  October  31,  1882.  The 
amount  of  the  assessments  due  was  tendered  to  the  associa- 
tion on  December  1,  1882,  and  the  association  declined 
to  receive  it.  The  court  held  that,  in  computing  the  time 
within  which  the  money  should  have  been  paid,  the  day  on 
which  the  notice  was  received  by  the  member  should  be  ex- 
cluded, that  the  money  should  have  been  paid  prior  to 
the  close  of  business  hours  on  November  30,  1882,  and  that 
the  association  had  a  right  to  decline  to  receive  the  amount  of 
the  assessments  tendered  on  December  1,  1882.' 

§  289.  Date  of  notice  g^iven  by  mail.  The  char- 
ter of  a  society  provided  that  members  were  to  be  "  notified 
by  the  society  or  otherwise,  either  by  circular  or  a  verbal 
notice  "  of  assessments  made  upon  them  for  losses,  and  that,  if 
they  did  not  pay  within  sixty  days,  their  rights  under  their 
policies  should  be  forfeited.  In  construing  this  clause  of  the 
charter,  the  court  says:  "  Was  the  fact  of  mailing  the  paper 
which  contained  the  information  for  the  member  sufficient  of 
itself  to  constitute  the  notification  required  by  the  charter? 
The  proposition  here  is  that  it  makes  no  difference  whether 
the  member  ever  gets  knowledge  of  the  assessments  upon  him, 
or  not,  provided  notice  is  regularly  mailed  to  him,  and,  there- 
fore, the  contention  is  to  be  viewed  on  the  assumption  that  he 
does  not  get  it.  *****  *  The  destruction  of  a  mail,  or 
accidents  preventing  the  delivery  of  matter,  or  even  a  con- 
siderable delay,  might  at  any  time,  without  fault  of  the  per- 
sons insured  eventuate  in  widespread  loss  and  injustice.  No 
construction  open  to  so  much  objection,  should  be  admitted 
unless  rendered  necessary  by  the  terms  of  the  charter;    and 

'  Protection  Life  etc.  v.   Palmer,  ■  Protection  Life   etc.  v.  Palmer, 

81  111.  88;  Ruse  v.  Mut.  Ben.  etc.,  26  81  111.  88. 

Barb.  55(5 ;  Rogers  v.  Capitol   Life,  ^  National  Mutual  etc.   v.    Miller, 

supra.     See  g394.  Ky. ;  2  S.  W.  Rep.  900. 


Chap.  14,  §290.]  assessments.  317 

they  do  not  require  it.  On  the  contrary,  they  contemplate 
that  the  members  shall  have  real  information  of  the  assess- 
ment. The  provision  is  not  that  notice  or  information  shall 
be  mailed  or  sent  or  forwarded.  The  members  are  to  be 
'notified,'  that  is,  informed;  to  have  made  known  to  them 
the  fact  of  the  assessment;  and  this  is  permitted  to  be  done 
either  by  oral  statements  to  the  members,  or  by  delivery  to 
them  of  written  statements  through  the  agency  of  the  post- 
office  or  some  other."  ' 

§  290.  Same  .subject  contiiiuecl.  In  Protective 
Life  Ins.  Co.  v.  Palmer  Adm'r  SI  111.  88,  one  of  the  questions 
was,  as  to  the  proper  construction  of  a  clause  in  the  contract 
of  insurance,  providing  that  the  assured  should,  within  thirty 
days  from  date  of  notice,  pay  to  the  company  the  assessment, 
etc.,  and  that  a  failure  to  do  so  should  render  the  policy  null 
and  void.  The  evidence  showed  that  a  notice  of  an  assessment 
was  dated  January  25, 1873,  that  it  was  mailed  to  the  assured  on 
February  3,  1873,  but  there  was  no  evidence  showing  that  he 
had  ever  received  it.  He  died  on  March  5,  1873,  without 
having  paid  the  assessment.  The  company  contended  that 
the  foregoing  clause  of  the  contract  of  insurance  meant 
that  the  payment  should  be  made  within  thirty  days  from 
the  date  written  on  the  paper  as  a  date.  But  the  court 
held,  that  the  true  object  of  the  agreement  was,  that  the 
assured  should  be  informed  that  an  assessment  had  been  made, 
which  he  was  required  to  pay  by  the  terms  of  his  agreement; 
that  the  insurance  company  undertook  and  agreed  that  they 
would  convey  to  him  information  of  the  fact  that  he  had  been 
assessed  and  the  amount  imposed,  and  that  he  agreed  that, 
after  they  should  put  him  in  possession  of  the  fact,  he  M'ould 
pay  the  amount  within  thirty  days.  And  the  court  further 
held,  that  the  time  within  which  payment  is  to  be  made,  is  not 
to  be  computed  from  the  actual  date  of  the  notice,  or  from  the 
day  it  was  mailed  to  the  member,  but,  when  sent  by  mail, 
from  the  time  at  which  the  notice  would,  in  regular  mode  of 
carrying  the  mail,  be  received  by  the  member  during  business 
hours.     The  company  was  held  liable  on  the  policy. 

In  discussing  the  questions  involved  in  the  case  of  The 
National  Mutual,  etc.  v.  Miller,  2  S.  W.  Kep.  900,  the  Court 
of  Appeals  of  Kentucky  recognize  this  to  be  the  true  rule  in 
determining  the  date  of  notice  of  assessments  in  like  cases. 

■Castner  v.  Farmers'  Mutual,  etc., 
50  Mich.  273. 


318  ASSESSMENTS.  [Chap.  14,  §291. 

§  391.     Same  subject  continued.      A  by-lstw  of  a 

society  provides  that  a  policy  issued  by  it  shall  become  void 
"  if  the  assured  shall  neglect,  for  the  term  of  thirty  days,  to 
pay  *  *  any  assessment  *  *  when  requested  to  do  so 
l3y  mail  or  otherwise."  In  construing  this  by-law,  the  court 
held,  that,  by  the  neglect  of  the  assured  to  pay  tlie  amount  of 
an  assessment,  for  thirty  days  after  a  written  request  for  pay- 
inent,  prepaid,  duly  directed,  and  deposited  by  the  society  in 
the  2)ost-office,  would,  in  due  course  of  mail,  reach  the  place 
of  his  residence,  as  set  forth  in  the  policy,  the  policy  was  for- 
feited and  i-endered  void,  and  that  such  neglect  to  pay  worked 
a  forfeiture  of  the  policy  Avhether  he  received  such  request  or 
not.' 

A  by-law  of  a  society  provided  that,  whenever  any  assess- 
ment should  be  levied,  and  notice  thereof  be  forwarded  to  the 
insured  by  mail  or  otherwise,  and  the  insured  should  for  the 
space  of  thirty  days  after  such  notice  refuse  or  neglect  to 
pay  the  same,  the  policy  might  be  declared  void.  In  con- 
struing this  by-law,  the  court  says:  "  In  contemplation  of 
law  the  plaintiff  had  notice  when  in  the  ordinary  course  of 
mail  the  notice  should  hav^e  reached  (the  member's  post- 
office  address).  It  would  greatly  embarrass  the  defendant, 
if  not  render  the  transaction  of  its  business  impractica- 
ble, if  it  should  be  required  to  prove  actual  delivery  of  notice 
to  the  party  assessed.  By  express  stipulation  it  is  agreed 
that  the  policy  may  be  forfeited  for  refusal  or  neglect  to  pay 
an  assessment  within  thirty  days  after  notice  thereof  forwarded 
to  the  insured  by  mail.  In  mailing  the  notice  tlie  company 
did  all  it  was  requii-ed  to  do.'' 

A  certificate  of  membership  provided  that  the  member 
should  be  notilied  of  each  assessment  "by  w^ritten  notice  de- 
posited in  the  post-office  in  the  city  of  New  Orleans,  addressed 
to  such  address  as  has  been  left  in  writing  at  the  office  of  the 
association  w^ith  the  secretary,"  and  that  "  on  his  failure  to  pay 
said  assessment  within  thirty  days  from  the  time  that  notice 
is  given  to  him  that  said  assessment  is  due,  this  policy  shall 
become  null  and  void."  A  notice  in  writing*  deposited  in 
the  post-office  in  New  Orleans  addressed  to  such  address  as 
has  been  left,  etc.,  is  a  sufficient  notice  of  assessment,  and  no 
evidence  will  be  admitted  to  show  that  the  member  did  not 
receive  the  notice.^ 

1  Lothrop  et  al.  v.  Greenfield  Mu-  ^  Epsteiu  v.  Mutual  Aid,  etc.,  As- 
tual,  etc.,  3  Allen  (83  Mass.)  83.  sociation,  28  La.  Ann.  938. 

-  Greely  v.  Iowa  State  Ins.  Co.,  50 
Iowa  86. 


Chap.  14,  §294.]  assessments.  319 

§  293.    Date  of  assessment — Date  of  notice.     A 

by-law  of  an  association  provided  that  "  every  member  failing 
to  pay  his  assessment  within  thirty  days  from  the  date  of 
such  assessment,  shall  stand  suspended,"  etc.  In  construing 
this  by-law,  the  appellate  court  of  Illinois  held  that  the 
duty  of  the  association  was  complete  upon  mailing  the 
assessment,  and  that  the  failure  of  such  assessment  to 
reach  the  assured,  by  reason  of  its  miscarriage  in  the  mail, 
or  the  absence  of  the  assured,  would  not  excuse  the  non- 
payment of  the  assessment  within  the  prescribed  time. 
The  court  says:  "In  the  case  of  Protection  Life  Ins.  Co.  v. 
Palmer  81  111.  88,  where  the  policy  is  declared  by  its  terms 
to  be  forfeited  unless  payment  is  made  within  thirty  days 
from  the  date  of  notice,  it  is  not  unreasonable  to  hold  that 
these  words  '■date  of  notice''  refer  to  the  time  when  the 
knowledge  of  the  facts  contained  in  the  letter  reach  the 
assured,  for  the  word  '  notice '  has  a  double  meaning,  and 
is  often  used  to  signify  either  the  paper  or  other  instru- 
mentality used  to  give  information,  or  the  information  it- 
self. !No  such  ambiguity  can  arise  by  the  use  of  the  word 
assessment.  It  cannot  refer  to  two  distinct  periods.  The  date 
of  the  assessment  means  necessarily  the  time  wlien  it  is 
made  out  by  the  secretary  and  mailed  to  the  assured  in 
accordance  with  the  terms  of  the  by-laws."  ^ 

§  393.  Notice  by  pnblication.  A  contract  of  in- 
surance provided  that  the  society  should  notify  its  members 
of  assessments  by  publication  for  five  days  in  certain  newspa- 
pers, and  that  the  members  should  pay  the  assessments  within 
thirty  days  aftei*  notification.  The  court  held  that  under  this 
contract  the  member  was  allowed  the  entire  thirty  days,  com- 
mencing and  counting  from  and  after  the  last  five  davs  of 
publication,  and  that  the  society  could  not  claim  the  forfeiture 
of  the  polic}^  for  non-payment  of  assessments  until  thirtv  days 
after  the  last  of  the  live  days  of  publication  had  expired.^ 

§  394.  Notice  of  date  of  payment.  A  society 
sent  out  the  following  notice  to  its  members:  "  MortuarV 
assessment  No.  30  will  be  due  and  payable  on  or  before  the 
first  day  of  May,  1872."  Without  having  paid  that  assess- 
ment, the  insured  died  on  the  night  of  ]May  1,  ls72  before 

'  Weakly  v.   N.  W.  Benevolent,         '  Wetmore  v.  l^lutuiil  Aid  &  Bon  , 
etc.,  19  111.  App.  337;   see  Greely  v.     etc.,  23  La.  Annual  770. 
Iowa  St  Ins.  Co.,  supra;  Epstein  v. 
Mutual  Aid,  etc.,  supra. 


320  ASSESSMENTS.  [ClIAP.  12,  §295. 

midnight.  There  was  nothing  in  the  contract  providing  at 
what  honr  the  assessment  should  be  paid,  or  tlie  policy  be 
forfeited,  and  no  provision,  as  is  generally  the  case  in  insur- 
ance contracts,  that  the  policy  should  cease  at  noon  on  the 
day  named,  if  the  assessment  should  not  be  paid.  The  court 
held  that  the  policy  continued  in  force  until  midnight  of  May 
1st,  and  that  the  society  was  liable.' 

§  395.    Insufficient  notice   of  assessment.    The 

notice  must  conform  to  the  laws  and  contract,  or  it  is  invalid. 
No  forfeiture  can  be  declared  for  non-payment  of  an  assess- 
ment where  the  notice  is  insufficient. 

"Where  the  contract  of  insurance  provides  that  the  member 
shall  pay  $2.50  quarterly  for  expenses,  and  that  he  shall  forfeit 
his  membership  if  the  quarterly  dues  shall  not  be  paid  within 
thirty  days  after  notice,  a  notice  to  pay  $10.00  as  annual  dues, 
in  advance,  is  not  a  sufficient  notice.^ 

Where  the  charter  and  by-laws  of  a  mutual  benefit  society 
provide  that,  where  the  board  of  directors  shall  order  an  assess- 
ment, the  secretary  shall  prepare  it,  and  that  it  shall  be  signed 
by  him  and  a  majority  of  the  board,  an  unsigned  and  uncerti- 
fied paper  containing  no  headings  to  explain  the  figures  set 
down  in  it,  cannot  be  treated  as  an  official  assessment  for  the 
purpose  of  forfeiting  the  policy  of  one  who  had  not  paid  the 
amount  of  his  assessment  until  after  the  expiration  of  the 
period  fixed  by  notice  to  him.^ 

The  articles  of  incorporation  and  by-laws  of  a  mutual  benefit 
society  required  that  assessments  be  made  by  the  secretary, 
and  the  certificates  of  membership  provided  that  assessments 
be  payable  within  thirty  days  after  notice  from  the  secretary. 
It  was  held  that  the  notice  contemplated  was  notice  of  the 
assessment,  and  that  the  certificate  was  not  forfeited  by  neglect 
to  pay  assessments  that  were  not  imposed  by  the  secretary — 
but,  only,  if  at  all,  by  persons  claiming  to  be  managers,  and 
where  the  only  notice  from  the  secretary  was  a  notice  of  for- 
feiture.' 

The  by-laws  of  a  society  provided  that,  upon  the  death  of  a 
member,  the  secretary  should  notify  the  members  through 
local  agents,  and  each  member  should,  within  ten  days  there- 
after pay  his  dues,  and  if  he  should  neglect  to  do  so  for  forty 

'  Och  V.  Homestead,  etc.,  Ins.  Co.,  ^  Baker  v.   The    Citizens    Mutual 

4  Pitsburg  Leg.  Journ.  <J8.  etc.,  51  Midi.  243. 

-  Mutual  Endowment  etc.    v.  Es-  ^IBates  v.    Detroit   Mut.    etc.,  51 

sender;  59  Md.  463.  Mich.  587. 


Chap.  14,  §296.]  assessments.  321 

days,  he  should  forfeit  his  raembership.  The  court,  in  con- 
struing this  by-law,  held  that  it  would  be  unjust  and  unreason- 
able to  hold  the  mere  notice  to  the  local  agents  as  notice  to 
members,  and  that  the  provision  must  be  construed  to  mean 
that,  the  local  agents  being  notified,  they  must  notify  the 
members  within  ten  days  thereafter,  and,  upon  receipt  of  such 
notice,  the  members  for  the  lirst  time  become  legally  bound 
to  pay  the  assessments,  and  must  pay  within  forty  days,' 

Where  a  notice  shows  that  the  assessment  was  levied  by  the 
society,  instead  of  by  the  board  of  directors,  the  notice  is  suffi- 
cient, as,  in  legal  effect,  it  is  the  same  thing.' 

A  notice  which  contained  only  a  fac  simile  of  the  seal  of 
the  lodge,  was  held  sufficient  notice  of  assessment,  where  it 
did  not  apjDcar  that  the  laws  of  the  society  required  an  impress 
seal  mark  to  be  placed  upon  the  notice.  Defects  of  form 
merely  are  not  material,  where  the  notice  gives  to  the  member 
actual  information  of  the  assessment." 

§  396.  Same  subject  continued.  A  notice  to  do 
an  act,  which  is  required  to  be  given  by  a  particular  person 
named,  contemplates  the  personal  action  and  judgment  of  the 
person  authorized  to  give  such  notice,  and  involves  the  exer- 
cise of  power  and  discretion  to  be  exerted  by  the  individual 
himself,  which  he  cannot  delegate  to  another.  Thus,  where  a 
by-law  of  a  mutual  benefit  society  provides  that  the  local 
secretary  shall  give  notice  of  assessments  to  members,  and 
another  by-law  declares  that  a  member,  by  a  failure  to  pay 
after  notice  by  the  general  secretary  shall  forfeit  his  right  to 
benefits,  a  member  is  entitled  to  notice  from  both  secretaries, 
and  a  card  on  which  the  name  of  the  general  secretary  is 
printed,  but  which  is  filled  up  and  addressed  by  the  local 
secretary,  is  not  sufficient  to  constitute  a  notice  from  the  gen- 
eral secretary.* 

When,  according  to  the  by-laws  of  a  mutual  benefit  society, 
the  notice  to  members  re(|uiring  them  to  pay  assessments, 
must  contain  a  list  of  all  deaths  that  have  occurred  since  the 
last  assessment,  and  notify  the  member  of  the  amount  due  from 
him  to  the  benefit  fund,  a  forfeiture  of  membership  cannot  be 

'  Coyle  V.  Kentucky  Grangers  etc.  *  Karcher  v.  Supreme   Lodtje,   137 

Ky.  2  S.  W.  Rep.  (J76:  Mass.  3G. 

-Williams  V.  German  Mutual  etc.  ■'Pavuv.  Mutual    Relief  Societv> 

21  68  111.  289.  17  Abb.  (N.  Y.)  N.  Cas.  53. 

SI 


322  ASSESSMENTS.  [Chap.  14,  §298. 

sustained  for  failure  to  pay  an  assessment,  when  the  notice 
thereof  did  not  conform  to  the  by-laws  in  these  respects.  ^ 
Where  provision  is  made  for  the  publication  of  a  list  of  the 
deaths,  it  will  be  presumed  that  the  members  adopted  such  a 
provision  in  order  to  see  the  necessity  of  the  assessment;  and 
where  the  society  agrees  to  notify  the  member  of  the  amount 
due  from  him  on  an  assessment,  he  has  a  right  to  rely  upon 
the  amount  as  stated  in  the  notice,  and  where  no  amount  is 
stated  the  notice  is  manifestly  insufficient. 

§  397.  Same  subject  contiiuied.  By  a  clause  of  the 
certiticate  of  membership,  a  forfeiture  was  authorized  if  the 
member  failed  to  pay  an  assessment  called  for,  w^ithin  thirty 
days  after  a  publication  of  the  notice  for  five  consecutive 
days.  Subsequent  to  the  issuing  of  the  certificate,  the  society 
addressed  a  notice  of  an  assessment  to  the  insured,  who  resided 
in  New  Orleans,  on  which  the  following  indorsement  was 
printed :  "  Members  residing  in  the  city  of  New  Orleans  are  here- 
bv  notified  that  the  notices  of  assessments  due  by  them  on  death 
of  a  member  are  only  given  through  newspaper  publication — 
in  special  notice  column— for  eight  consecutive  days;  being 
always  published  on  the  first  Sunday  of  the  month  and  con- 
tinued through  the  week,  including  the  second  Sunday.  Pay- 
ment is  required  at  the  office  within  thirty  days  from  date  of 
publication;  the  failure  to  make  payment  within  thirty  days 
operates  a  forfeiture  of  his  or  her  policy,  and  the  name  of  such 
delinquent  will  be  erased  from  the  books  of  said  association. 
Notices  of  assessments  are  published  in  the  New  Orleans 
Times.,  New  Orleans  Bee.,  the  Daily  Picayune  and  German 
Gazette.  Special  notices  will  not  be  sent  to  residence  or  bus- 
iness location."  While  this  indorsement  remained  unrecalled, 
it  was  a  voluntary  extension  of  the  time  of  the  publication,  in 
order  to  effect  a  forfeiture  as  agreed  to  in  the  contract  of  insur- 
ance; and  under  this  agreement  the  forfeiture  would  not  occur 
unless  there  was  a  failure  to  pay  the  assessment  called  for, 
iifter  thirty  days  from  the  publication  of  notice  for  eight  con- 
secutive days.  Where  the  notice,  therefore,  under  which  for- 
feiture was  claimed  was  only  published  for  seven  days,  it  was 
held  insufficient.^ 

§  398.  Same  subject  coiitiuuecl.  A  mutual  bene- 
fit society  provided  in  its  by-laws  that  if  a  member  should  fail 

'  Miner  v.  Michigan  Mutual  Ben.  -  Fitzpatrick  v.  Mutual  and  Benev- 
Ass'n.,  Mich.;  29  N.  W.  Rep.  852.        olent  etc.  Co.,  25  La.  Am.  443. 


Chap.  14,  §298.]  assessments.  323 

to  pay  his  assessment  for  ten  days  after  notice  thereof  by  pub- 
lication, his  wife  should  have  no  benefit  fund  in  case  of  his 
death;  and  if  he  should  fail  for  thirty  days  so  to  pay,  he  might 
be  expelled.  A  by-law  of  the  society  provided  for  publishing 
notice  of  every  death  and  assessment,  and  of  the  time  when  the 
same  was  required  to  be  paid,  and  also  provided  that  a  collector 
should  be  appointed  to  notify  members  in  arrears  for  such  dues, 
and  to  collect  them.  A  member  died  in  April  1873,  and 
notice  was  published  in  two  newspapers  in  the  city  where  the 
members  resided,  stating  the  fact,  and  that  dues  on  account 
thereof  were  payable  April  30,  1873.  B.,  another  member, 
was  drowned  on  May  11,  1873.  There  was  no  evidence  that 
he  was  aware  of  the  death  of  the  member  who  died  in  April, 
■or  that  he  knew  of  the  publication  of  notice  in  the  newspapers. 
The  collector  of  the  society  did  not  call  upon  him  for,  or  notify 
him  of  the  assessment.  The  society  refused  to  pay  the  bene- 
fit fund  to  B.'s  widow.  The  court  held  that  members  of  this 
society  did  not  bind  tliemselves  to  ascertain  the  fact  of  the  death 
of  a  member  from  publication  only  at  the  risk  of  forfeiting 
their  interest  in  the  benefit  fund,  and  that  B.  did  not  lose  his 
right  to  have  this  fund  paid  to  his  widow,  as  he  had  no  knowl- 
edge of  the  death  of  the  party  on  whose  account  he  had  been 
assessed,  or  of  the  publications  in  the  newspaper;  and  until 
he  had,  or  until  after  demand  made  upon  him  by  such  collec- 
tor, his  right  to  pay  such  assessment  and  preserve  his  rights 
in  the  fund  continued.' 

A  notice  of  an  assessment  is  invalid,  which  requires  pay- 
ment to  be  made  before  the  expiration  of  the  time  in  which 
the  member  may,  by  tlie  contract,  make  the  payment." 

Thus,  where  the  by-laws  of  a  mutual  benefit  society  provide 
that,  upon  the  failure  of  a  member  to  pay  his  assessment 
within  forty  days  after  notice  from  the  secretary  of  the  death 
of  a  member,  his  claims  upon  the  society  shall  be  forfeited,  a 
notice  from  the  secretary  requiring  payment  to  be  made 
within  tliirtij  days  is  a  nullity,  as  there  is  no  authority  for  the 
issuing  of  such  a  notice.^ 

Where  the  by-laws  provide  that  the  notices  of  assessment 
shall  be  given  by  publication  in  three  newspapers  published  in 
the  county  where  the  society  is  doing  business,  it  is  not  siiffi- 

'  Mutual  Relief  Society  V.  Billau.  'Frey  v.  Wellington  Mutual,  4 
{Superior  Court  of  Cincinnati)  3  Am.     Ontario  293. 

Law  Record,  546.  '  Ilaskins  v.  Ky..Grangers'  Mutual 

etc.,  7  Kv.  Law  Rep.  371. 


324  ASSESSMENTS.  [ClIAP.  14,  §299. 

cient  to  show  that  such  notices  were  published  in   two  papers 
in  that  county.' 

§  299.  Same  subject  continued.  In  the  case  of 
Ancient  Order  United  Workmen  v,  Moore,  Ky. — 1  Ky.  L. 
Rep.  93,  the  principle  is  laid  down  that  if  ample  notice  is  given, 
it  is  not  necessary  that  the  full  time  allowed  by  the  charter 
shall  intervene  between  the  date  of  the  assessment  and  the  sus- 
pension of  the  rights  under  the  benefit  certificate. 

The  constitution  of  a  society  provided  that  "  written  notices 
of  assessment  shall  be  made  and  sent  by  the  financiers,  bearing 
date  of  not  later  than  the  8th  of  the  month,  in  which  the 
notice  was  issued  by  the  supreme  recorder,  twenty  days  from 
the  date  of  such  notice  by  the  financier,  and  not  later  than  the 
28th  day  of  said  month  in  which  said  notice  of  assessment 
was  given,  any  member  holding  a  certificate  of  the  beneficiary 
fund,  having  failed  or  neglected  to  pay  such  assessment  into 
the  beneficiary  fund,  in  his  subordinate  lodge,  shall  forfeit  all 
his  rights  under  such  certificate." 

The  court  says:  "  Although  the  notice  required  to  be  given 
by  the  financier  was  not  sent  until  the  9th  or  10th  of  Feb- 
ruary, there  was  ample  time,  after  it  was  sent,  to  pay  the 
assessment  before  the  28th,  and  the  law  required  it  to  be  paid 
on  that  day,  although  there  was  not  twenty  days  between  the 
day  the  notice  was  sent,  and  the  28th  day  of  the  month." 

If  the  principle  announced  in  this  case  were  generally  recog- 
nized, an  element  of  great  uncertainty  would  exist  in  regard 
to  the  sufficiency  of  notices  of  assessment  in  mutual  benefit 
insurance.  Happily,  the  case  does  not  seem  to  have  been 
followed  as  an  authority  upon  this  point.  The  interpretation 
given  to  the  clause  of  the  constitution  just  quoted  seems  to 
be  contrary  to  the  well  settled  rule  of  construction,  that  the 
language  shall  be  taken  most  strongly  against  the  insurer. 

•  Sande  v.  Groves,  58  N.  Y.  94. 


Chap.  14,  §300.]  assessments.  325 


ASSESSMENTS.— Part  II. 


S  r    o,,o'  [  Payment  of  assessment. 

Sec.  303.     Payment  to  subordinate  lodge — agency  of  lodges. 
Sec.  304.     Receipt  of  assessment  may  be  contradicted. 
Sec.  305.    Tender  of  assessment. 

Sec.  306.    Refusal  of  society  to  accept  assesssment — remedy  of  mem- 
ber. 

Src   SOI)  f  Forfeiture  for  non-payment  of  assessment. 

Sec.  310.  >  When    affirmative    act    of  society    declaring    forfeiture    is 
Sec.  313.  )      required. 

Sec  314.  )  When  affirmative  act  of  the  society  declaring  forfeiture  is 
Sec  320.  J      not  required. 

Sfc   3^5  (■  Restoration  after  suspension  or  forfeiture. 

§  300.  Payment  of  assessment.  Where  a  policy 
of  insurance  issued  by  a  mutual  benefit  society  provides  that, 
if  any  assessment  owin;^  by  the  assured  shall  not  be  received 
by  the  society  within  thirty  days  from  the  date  of  notice,  the 
policy  shall  be  null  and  void,  and  there  is  no  provision  either 
in  the  contract  of  insurance  or  the  notice,  stipulating  the  mode 
of  remitting  the  assessment,  the  member  is  bound  to  see  that 
the  money  is  actually  received  by  the  society  within  the  time 
specified,  or  forfeit  his  policy. 

But  where  a  notice  directs  the  member  to  remit  the  amount 
by  post-office  order,  or  draft  payable  to  the  society,  the  right 
to  forfeit  the  policy,  by  reason  of  the  non-payment  of  the 
assessment  within  the  time  limited  by  the  policy,  is  waived, 
and  all  that  the  member  can  be  expected  to  do,  under 
such  circumstances,  is  to  promptly  observe  such  directions. 
When  he  has  done  so,  he  has  a  right  to  supjiose  his  dues  are 
paid,  and  he  cannot  be  expected  to  know  to  the  contrary  until 
notified  by  the  society,  or  until  the  lapse  of  a  reasonable  time 
to  receive  a  notice  from  the  society.' 

In  all  cases  where  by  the  direction  or  ao^reement  of  the 
creditor,  money  is  sent  by  mail  in  discharge  oi  a  debt,  proof 
that  a  letter,  containing  the  requisite  sum,  duly  sealed  and 

'  Protection  Life  Ins.  Co.  v.  Foote, 
79  III.  361. 


326  ASSESSMENTS.  [Chap.  14,  §302. 

directed,  was  deposited  in  the  post-office,  is  sufficient  to  main- 
tain a  plea  of  payment.'  This  doctrine  rests  on  tlie  principle 
that  the  debtor  has  done  all  that  was  in  his  power  to  ]:»erform 
the  contract,  and  that  the  risk  of  transmission  was  assumed  by 
the  creditor. 

§  301.    Payment  of  assessment  continued.   The 

decision  of  the  officers  respecting  the  construction  of  a  contract 
of  insurance,  and  the  custom  of  paying  assessments,  arising 
under  such  decision,  are  not  binding  upon  members. 

Where  the  contract  provides  for  the  payment  of  assessments 
to  an  officer  of  the  society,  and  those  in  authority  in  the  order 
decide  that  they  must  be  paid  at  a  meeting  of  the  lodge,  and  can- 
not be  paid  otherwise,  and  a  custom  of  so  paying  them  grows  up 
in  the  order,  the  terms  of  the  express  contract  of  the  parties, 
and  not  the  custom  or  habitual  mode  of  doing  business,  must 
determine  the  rights  and  duties  created  by  that  contract.' 

It  may  well  be  doubted  whether  it  is  competent  for  those 
representing  a  mutual  assessment  life  insurance  association  to 
accept  anything  less  than  the  total  amount  of  the  assessment 
laid  upon  a  member,  or  to  accept  as  payment  thereof  anything 
but  money.  If  this  course  of  dealing  might  be  carried  on 
with  one  member,  it  might  also  be  done  with  all  members, 
and  thus  the  sole  purpose  of  such  an  organization  might  be 
hindered  and  defeated.' 

In  Ancient  Order  of  United  Workmen  v.  Moore,  Ky.,  it  was 
held  that  where  a  member  of  a  subordinate  lodge  had  money 
due  him  for  "  sick  benefits,"  it  was  not  the  right  of  his  lodge 
to  appropriate  it  in  payment  of  an  assessment  ordered  by  the 
grand  lodge,  without  the  members  direction,  Pryor,  C.  J., 
dissenting.  The  majority  of  the  court  based  their  opinion  on 
the  distinction  between  the  funds  created  by  assessments 
ordered  by  the  grand  lodge,  which  were  for  the  benefit  of 
the  families  of  members  after  their  death,  and  the  dues  col- 
lected by  the  subordinate  lodges,  which  were  for  the  payment 
of  "  sick  benefits  "  to  sick  members.'' 

§  303.      Payment     of    assessment     continued. 

Where  the  treasurer  of  a  subordinate  council  remitted  to  the 

'  Warwicke  v.  Noakes,  1  Peake  R.  79  111.  361 ;  Buffum  v.   Fayette  Mut. 

67;  Hawkins  v.  Rutt,  lb.  186;  King-  Ins.  Co.  3  Allen  (Mass.)  360;   Hofl- 

ton  V  Kington,  11  M.  &  W.  233.  man  v.  John   Hancock  Mutual  etc. 

''  Manson  v.  Grand  Lodge  30  Minn.  92  U.  8.  161. 
509 ;  Wiegin  v.  Knights  of  Pythias        *•  9   Ins.    Law    Journal    539 ;    See 

31  Fed  Rep.  122.  Hawkshaw  v.   Supreme  Lodge,    29 

2  Protection  Life  Ins.  Co.  v.  Foote,  Fed.  Rep.  770-774. 


ClIAP.  14,  §3C>3.]  ASSESSMENTS.  327 

supreme  treasurer  of  the  society  an  amount  which  equaled, 
and  was  received  as,  the  aggregate  amount  due  from  his 
council  for  each  member  thereof,  and  the  remittance  inchided 
the  amount  assessed  against  him,  the  fact  that  the  payment  of 
his  assessment  was  made  by  him  directly  to  the  supreme  treas- 
urer, instead  of  indirectly  through  the  collector,  as  ].irovided 
by  the  rules  of  the  council,  maj'  not  be  urged  to  deprive  his 
widow  of  the  beneiit  of  such  payment. 

The  main  purpose  of  such  rules  for  the  collection  of  assess- 
ments, is  to  put  into  the  hands  of  the  supi-eme  treasurer  the 
amount  payable  by  each  member  of  the  society.  If  the  money 
gets  into  the  treasury,  it  matters  little  by  what  path  it  got 
there,  so  far  as  the  rights  of  the  beneficiary  are  con- 
cerned. ' 

§  303.  Payment  to  subordinate  lo(lg:e — agency 
of  lodges.  Where  a  local  lodge  admits  a  member  into  a 
mutual  benefit  society,  collects  his  admission  fee  and  all  assess- 
ments levied  upon  him,  and  remits  such  assessments  to  the 
supreme  lodge  or  directory  of  the  society,  it  is  to  be  regarded 
as  the  agent  of  the  supreme  lodge  or  directory,  at  least  to  this 
extent,  that  payment  of  assessments  to  the  local  lodge  is  a 
payment  to  the  higher  body  of  the  order.  The  default  of  the 
local  lodge  in  paying  over  to  the  higher  body  of  the  order  the 
assessments  paid  to  it  by  its  members,  does  not  alt'ect  the 
rights  of  such  members. ''' 

The  relations  which  local  and  subordinate  lodges  of  such 
societies  shall  bear  to  the  supreme  lodge  or  directory,  and  the 
members  of  the  order,  are  proper  matters  for  regulation  in 
the  by-laws  of  the  society.  Wliere  the  by-laws  on  the  subject 
are  artistically  and  plainly  di-awn,  it  is  not  difficult  to  deter- 
mine these  relations,  but  they  frequently  contain  so  many  in- 
consistent and  vague  provisions  on  the  subject  that  a  consist- 
ent interpretation  and  construction  of  them  is  impossible. 

A  by-law  of  the  supreme  lodge  of  the  Knights  of  Honor 
provided  that  ''any  lodge  failing,  neglecting  or  refusing  to  for- 
ward the  same"  (assessment  laid  u])on  it)  "witliin  thirty  days 
from  the  date  of  said  notice,  shall  stand  suspended,''  and  that 
"  if  a  death  occur  in  said  lodge  during  such  suspension,  no 
death  beneiit  shall  be  paid,"  etc.     In  construing  the  meaning 

'Farric  v.  Supreme   Council,    15  369;  Erdinann  v.  Mut.  Ins.  Co.,  Order 

N.  Y.  St.  lieporter,  155.  Herman's  Son.<i,  44  Wis.  376 ;  Barbaro 

-  Schnnt'k  v.  Geu^ensoitijior  Witt-  v.  Occidental  Grove,  etc.,  4  Mo.  App. 

wen    und     Waiseu-Fond,    44     Wis.  420. 


328  ASSPJSSMENTS.  [CuAP.  14,  §304. 

of  this  bj-luw  the  Supreme  Court  of  Indiana  says:  "This 
by-hxw  coutemphitos  the  restoration  of  the  delinquent  lod<^e 
on  the  jmyinent,  after  suspension,  of  the  required  assessment, 
for  it  prohibits  the  payment  of  such  benefits  when  death  oc- 
curs during  such  suspension.  Now,  the  question  arises, 
what  is  meant  by  the  words  'if  a  death  occurs  in  such  lod<2:e 
during  such  suspension,  no  death  benefit  shall  be  paid?'  Is 
it  meant  by  the  provision  to  cut  off  absolutely,  as  forfeited,  all 
right  to  death  benefits  of  a  meml)er  in  good  standing,  who 
dies  during  the  suspension  of  his  lodge,  and  who  was  not  in 
default  in  the  payment  of  his  dues  or  otherwise,  ])ecause  his 
lodge  was  in  default  at  the  tim&  of  his  death,  though  his  lodge 
afterwards  pays  up  and  is  restored?  This  would  be  a  harsh 
construction,  and  one  that  cannot  be  adopted,  if  the  provision 
admits  of  any  other  reasonable  interpretation.  Forfeitures 
are  not  favored  in  law,  and  instruments  will  be  so  construed 
as  to  avoid  them,  if  it  can  be  done  without  doing  violence  to 
the  language  employed,  *  *  *  *  ,  "W"e  think  the  pro- 
vision, fairly  construed,  means  that  where  a  death  occurs  dur- 
ing the  suspension  of  the  subordinate  lodge,  no  death  benefit 
shall  be  paid  during  such  suspension,  as  if  it  read  as  follows: 
'  If  a  death  occur  in  said  lodge  during  such  suspension,  no 
death  benefit  shall  be  paid  during  such  suspension.'  This  con- 
struction seems  to  us  to  be  reasonable  and  well  calculated  to 
carry  out  the  general  purpose  of  the  defendant's  organization. 
When  a  subordinate  lodge  is  thus  suspended,  no  death  benefits 
are  to  be  paid  on  behalf  of  members  dying  during  the  suspen- 
sion. This  is  a  strong  incentive  to  the  delinquent  lodge  to 
respond  to  the  calls  upon  it,  and  be  restored.  When  restored, 
the  rights  to  death  benefits,  wdiich  were  suspended  with  the 
suspension  of  the  lodge,  are  restored  with  its  restoration."  ' 

§  304.  Receipt  of  assessment  may  be  contra- 
dicted. An  acknowledgment  in  a  certificate  of  member- 
ship that  the  admission  fee  and  certain  assessments  have 
been  paid,  may  be  contradicted  or  explained;  it  is  not  con- 
clusive, and  does  not  operate  as  an  estoppel.* 

But  where  a  certificate  provided  that  if  a  "  binding  receipt " 
should  be  issued,  and  the  "  number  of  a  binding  receipt  is  in- 
serted, it  becomes  conclusive  evidence  that  the  above  amount 
has  been  paid,"  and  the  number  of  a  binding  receipt  was  in- 
serted in  the  certificate,  it  was  held  that,  as  against  the  bene- 

'  Supreme  Lodge  v.  Abbott,  83  -  See  Bliss  on  Life  Insurance  at 
Ind.  1.  section  376. 


Chap.  14,  §305.]  assessments.  329 

ficiary,  the  insurer  was  estopped  from  averrincr  that  the  as- 
sessment, acknowledged  in  the  policy  and  in  the  "binding 
receipt "  to  have  been  received,  were  not  paid.' 

Some  authorities  go  so  far  as  to  hold  that,  upon  grounds 
of  public  policy,  an  insurance  company  will  be  estopped  to 
deny,  as  against  its  acknowledgment  in  its  policy,  that  the 
consideration  for  the  policy  has  been  paid.'' 

But,  according  to  the  weight  of  authority,  the  recital  in  a 
delivered  policy,  of  the  receipt  of  the  consideration  for  which 
it  was  issued,  is  -prima  facie ^  and  only  'prima  facie  evidence 
of  the  fact.' 

§  305.  Tender  of  assessment.  The  tender  of  an 
assessment  is  just  as  effectual  to  preserve  the  rights  of  a  subor- 
dinate lodge  and  its  members,  or  the  rights  of  a  member  of  a 
mutual  beneiit  society,  as  the  payment  of  the  assessment. 
For  the  purpose  of  avoiding  penalties  and  forfeitures,  or 
the  loss  of  any  right  or  privilege,  a  tender  is  the  exact 
equivalent  of  payment.  It  does  not  have  to  be  repeated. 
After  the  tender  is  made,  the  burden  is  on  the  creditor  to  act. 
He  must  demand  the  debt,  and  it  is  only  required  of  the  debtor 
that  he  be  ready  to  meet  the  demand.  * 

In  mutual  benefit  societies,  the  holder  of  a  certificate  is  en- 
titled to  notice  of  assessments  before  he  can  be  declared  in 
default  for  their  non-payment,  and,  in  the  absence  of  notice, 
no  tender  of  the  amount  of  such  assessments  is  necessary,  in 
order  to  prevent  a  forfeiture  of  membership.'' 

If  a  member  who  has  been  expelled  from  a  society,  appeals 
to  a  higher  tribunal  within  the  order,  or  resorts  to  court  for 
reinstatement  as  a  member,  and,  pending  the  appeal  or  legal 
proceedings,  regularh'  tenders  his  dues  and  assessments  until 
his  death,  his  beneficiary,  on  a  reversal  of  the  judgment,  or 
upon  a  reinstatement  by  the  court,  after  his  death,  will  be 
entitled  to  the  benefit."     If  dues  or  assessments  in  a  society 

'  Kline  v.  National  Benefit  Ass'n,  Co.  v.  Smith,  3  Whart.  520;  Sheldon 

111    Ind.   462;   11   N.   E.   Rep.   b20  v.  Ins.  Co.,  26  N.  Y.  460;    Baker  v. 

National  Benefit  Ass'n  v.  Jackson,  Ins  Co.,  43    N.  Y.   283;    Ins.   Co.  v. 

114  111.  533.  Hasbrook,  32  Ind.  447. 

^  Provident  Life,  etc.,  v.  Fennell.  ■•  Hall  v.  Supreme  Lodtre  K.  of  H. 

49  111.  180;  Teutonia  Life  Ins.  Co  v.  24  Fed.  Rei>  450;  People'^v.  .Mutual 

Anderson,  77   111.384;    Grit  v.  Na-  Life,  92  N.  Y.  105;  Meyer  v.  Ins.  Co. 

tional  Insurance   Co.,  25  Barb.  189  ;  73  N.  Y.  516. 

3  Kent's  Coin.  260;  Insurance  Co.  v.  '  Covenant  Benefit  Ass'n.  v.  Spies 

Cashow,  41  Md.  59.  et  al.  114  111.  467. 

^  1  Greenleaf  Ev.  at  section  305;  *  Marek    v.    Supreme   Lodge,  29 

Ins.   Co.   V.   Carpenter,  4   Wis.   20;  Fed.  Hep  896. 
Bergsou  v.  Ins.  Co., 38  Cal.  541 ;  Ins. 


330  ASSESSMENTS.  [Chap.  14,  §307. 

are  payable  at  a  certain  fixed  time,  it  would  be  the  safe  course 
for  a  member  seeking  to  reverse  a  judgment  of  expulsion,  or 
to  be  restored  to  membership,  to  tender  the  dues  and  assess- 
ments as  they  become  due.  If,  however,  assessments  are  pay- 
able only  after  notice,  the  member  will  be  under  no  obligation 
to  make  the  tender  until  he  has  been  notiiiedof  the  assessment. 

§  306.^  Refusal  of  society  to  accept  assessiueiit 
— remedy  of  iiieinber.  Where  a  mutual  benefit  society 
has  refused  to  receive  from  the  member  the  amount  of  the 
assessment  on  his  certificate,  basing  such  refusal  on  the  ground 
that  the  rights  of  the  member  had  been  forfeited  by  non-pay- 
ment of  the  assessment  at  the  time  stipulated  for  its  payment, 
the  member,  if  the  refusal  is  wrongful,  has  an  election  of  rem- 
edies. He  may,  if  it  be  practicable  under  the  plan  of  paying 
assessments,  tender  the  assessments  as  they  become  due  until 
the  certificate  is  payable,  and  then  his  beneficiary  may  recover 
the  amount  provided  for  therein  in  an  action  thereon.  He 
may,  in  an  action  fortherecission  of  the  contract,  recover  back 
the  assessments  paid,  with  interest.  Or  he  may  maintain  an 
action  to  obtain  a  judgment  ordering  that  the  certificate  shall 
be  continued  in  force.' 

§  307.  Forfeiture  for  iioii-paymeiit  of  assess- 
ments. In  mutual  benefit  societies,  provision  is  made  either 
in  the  charter,  bj^-laws,  or  contract  of  membership  for  assess- 
ments upon  members  to  pay  death  losses,  and  for  forfeiture 
of  all  rights  of  membership,  in  case  of  non-payment  thereof 
by  members,  in  accordance  with  the  rules  and  regulations  upon 
the  subject  of  their  payment.  As  these  societies  have  no  means 
of  meeting  their  obligations,  except  from  the  payments  made 
upon  assessments,  it  is  proper,  and  even  necessary,  to  make 
stringent  provisions  for  their  prompt  payment. 

Provisions  for  forfeiture  in  case  of  non-payment  within  a 
certain  stipulated  time,  have  been  re]:»eatedly  held  to  be  valid 
and  binding  in  ordinary  life  policies,  and  there  are  many  reasons 
why  they  should  be  more  rigidly  applied  in  mutual  assessment 
societies.^  As  before  stated  in  this  chapter,  the  levy  of  an  assess- 
ment by  a  mutual  benefit  society,  as  a  general  rule,  creates  no 
liability  on  the  part  of  the  member  to  pay,  and  it  is,  therefore, 

'  Union  Cent.  L.  Ins.  Co.    v.  Pott-  S56etseq.\    N  Y.  Life   Ins.   Co,    v. 

ker,  33  Oh.  St  459 ;  Meyer  v.  Knicli-  Statham,  93  U.  S.  24 ;    Phoenix  .  Ins. 

erboclierL.  Ins.  Co.,  73  N.  Y.    516;  Co.  v.  Baker,  85  111.  210. 

Day  V.   Conn.  Gen.   L.   Ins.    Co..  45  ^  Madeira  v.  Merchants'  Exchange 

Conn.  480;    May  on  Ins.  at  section  Mutual  etc.,  16  Fed.  Rep.  749. 


Chap.  14,  §308.]  assessments.  331 

apparent  that  I'igid  and  stringent  provisions  for  forfeiture  for 
non-payment  of  assessments  are  necessary  for  the  existence  of 
such  societies. 

A  certificate  of  insurance,  issued  to  one  of  its  members  by 
a  society,  in  which  the  plan  of  meeting  its  losses  and  ex])enses  is 
by  levying  assessments  upon  its  members  for  their  contribu- 
tions, is  not  forfeited  or  suspended  by  the  failure  of  a  member  to 
pay  an  assessment  thus  levied,  unless  such  forfeiture  or  sus- 
pension is  provided  for  as  a  part  of  the  contract  of  insur- 
ance.' 

§  308.  Forfeiture  coiitiiiuecl.  One  of  the  by-laws 
of  a  society  provided  for  giving  written  notice  to  any  member 
in  arrears  six  months  for  dues,  calling  his  attention  to  the  fact 
that  he  will  be  stricken  from  the  roll,  in  case  he  does  not  pay 
his  dues.  Another  by-law  imposed  a  tine  for  an  omission  of 
a  member  to  give  notice  to  the  society  of  a  change  of  resi- 
dence. At  the  time  of  joining,  plaintiff's  intestate  gave  notice 
of  his  then  place  of  residence.  He  subsequently  changed  his 
residence,  but  did  not  give  notice.  Because  of  failure  to  pay 
his  dues,  his  name  was  stricken  from  the  rolls.  No  notice  was 
given  him  as  provided  by  the  by-laws.  In  an  action  brought 
to  recover  the  sum  provided  by  the  society's  by-laws,  to  be 
paid  on  the  death  of  a  member,  it  was  held  that  plaintiff  was 
entitled  to  recover;  that  the  omission  of  the  deceased  to  give 
notice  of  his  change  of  residence  was  no  excuse  for  a  failure 
to  give  him  the  prescribed  notice.'' 

Where  the  contract  of  insurance  is  silent  as  to  whether  a 
member  in  default  shall  have  notice  of  his  proposed  expul- 
sion, such  notice  must  be  given  in  order  tliat  he  nuxy  have  an 
opportunity  to  be  heard. ^ 

Where,  by  the  by-laws,  notice  is  required  to  be  given  to 
members  who  fail  to  pay  their  assessments,  there  can  be  no 
forfeiture  without  such  notice." 

.  A  by-law  of  a  society  is  to  the  effect  that,  "  when  a  mem- 
ber neglects  for  six  months  to  pay  his  contributions,  or  the 
entire  amount  of  his  entrance,  the  society  may  strike  his  name 
from  the  list  of  members,  and  thereu])on  he  no  longer  forms 

'  District  Gnind  Lodge    v.    Colin,  ^  Fritz  v.  St.  Stephen's  Society,  63 

20  111.   A])]).   335;    Sanford   v.    Cal.  How.  Pr.  6!). 

Ins.  Association,  G3  Cal.   547;    Mut.  ■•  Pulford  v.  Fire  Department  etc., 

Ben.    Life    Ins.   Co.   v.   French,   30  31  Mich.  458;  Wachtel  v.  Benevolent 

Ohio  St.  240.  So(iety,84  N.Y.  28 ;  People  v.  Benev- 

'  Watchel  v.  "Widows  and  Orphans  oleut  Society,  24  Honv.  Pr.  216. 
Society,  84  N.  Y.  28. 


332  ASSESSMENTS.  [Chap.  14,  §310. 

part  of  the  association.  To  that  end,  at  each  regular  general 
meeting  the  collectors-treasurers  are  bound  to  make  known 
the  names  of  those  thus  indebted  for  six  months'  contributions, 
or  for  a  balance  of  their  entrance;  and  thereupon  any  member 
may  make  a  motion  that  sucb  members  be  struck  from  the 
list  of  the  society's  members."  Under  this  by-law,  a  member 
may  not  be  expelled  without  notice  and  opportunity  to  be 
heard  upon  the  subject  of  his  arrearage.'  Such  a  by-law  does 
not  take  from  a  delinquent  member  either  expressly  or  Ijy 
implication,  the  right  to  notice,  and  this  right  is  valuable, 
because,  on  such  notice,  a  member  may  give  a  sufficient  excuse 
for  his  delinquency,  or,  on  hearing  him,  the  society  may  be 
inclined  not  to  exercise  rigor  in  enforcing  the  penalty  of 
default. 

§  309.  Forfeiture  contiiuied.  A  mutual  benefit 
society  was  organized  for  the  express  purpose  of  becoming  the 
successor  of  "  The  Widows'  and  Orphans'  Mutual  Aid 
Society."  A  resolution  of  the  new  society  provided  for  the 
surrender  of  the  old  certiticates,  and  the  issue  of  new  certifi- 
cate by  it  as  successor,  and  further  provided:  "  all  assessments 
made  by  the  old  society  on  its  members,  not  due  at  the  time 
of  transfer  of  the  member  from  the  old  to  the  new  organiza- 
tion, shall  become  due  and  payable  to  the  latter  on  the  day  it 
would  become  due  and  payable  to  the  society,  had  the 
member  not  been  transferred  therefrom." 

A  member  surrendered  his  old  certificate  and  received  a  new 
one  from  the  new  society.  This  stipulated  for  the  payment 
of  a  certain  sum,  and  provided  that  "  a  failure  to  pay  at  the 
home  office  any  assessment  made  by  the  society  within  the 
prescribed  time,  shall  work  a  forfeiture  of  this  certificate,  and 
the  party  can  only  be  reinstated  on  terms  as  set  forth  in  the 
by-laws."  In  an  action  on  the  certificate,  the  society  set  up  the 
non-payment  by  the  deceased  member  of  an  assessment  made 
against  him  by  the  old  organization,  to  meet  a  death  loss  while 
he  was  a  member  thereof,  and  which  sum,  by  the  terms  of  the 
resolution  under  which  he  was  admitted  to  membership  in  the 
new  society,  became  payable  to  it,  but  it  was  held  that,  under 
the  contract,  a  failure  to  pay  assessments  made  by  the  new 
society,  not  by  the  old,  worked  a  forfeiture." 

§  310.     When     affirmative    act     of    society    is 

'  Lapierre  v.   L'Unioa   St.  Joseph        "^  Mutual  L.  &  A.  Society  v.  Miller 
21  Lower  Canada  Jurist  333.  23  111.  App.  34. 


Chap.  14,  §311.]  assessments.  333 

required.  The  charter  of  a  society  provided  "■  should  any 
member  neglect  to  pay  his  arrearages  for  three  months,  he 
shall  be  expelled."  In  construing  this  provision,  the  court 
said : 

"  There  must  be  some  act  of  the  society  declaring  the 
expulsion,  and  this  cannot  be  done  without  a  vote  of  expulsion, 
after  notice  to  the  member  supposed  to  be  in  default.  For  it 
may  be,  that  he  may  either  prove  that  he  is  not  in  arrears,  or 
give  such  reason  for  his  default  as  the  society  may  think  suffi- 
cient. If  he  is  present  when  the  subject  is  taken  up,  and 
willing  to  enter  into  the  inquiry  immediately,  there  is  no 
occasion  for  further  notice.  But  no  man  should  be  expelled 
in  his  absence  without  notice.  It  appears  that  Ilansell  was 
present,  but  no  question  was  made,  nor  any  vote  taken  on  his 
expulsion.  He  had  an  excuse  to  offer,  viz.,  that  the  society 
was  indebted  to  him,  for  his  services  as  secretary,  in  a  larger 
sum  than  the  amount  of  the  arrears  of  his  monthly  contribu- 
tion. And  had  he  urged  this  defence  when  the  question  of 
his  expulsion  was  put,  there  is  no  saying  what  inliuence  it 
might  have  had  on  the  vote.  Be  that  as  it  may,  he  ought  to 
have  had  the  opportunity.  The  terms  of  the  charter  have  not 
been  complied  with."  ' 

§  311.  Same  subject  continued.  The  constitution 
of  an  incorporated  voluntary  society,  after  providing  that  every 
member  shall  pay  into  the  treasury  a  designated  annual  con- 
tribution to  become  due  and  payable  on  January  1,  of  each 
year,  declares  that  if  the  contribution  is  not  paid  by  the  first 
meeting  in  April,  thereafter,  the  defaulter  shall  forfeit  his 
membership,  and  his  name  shall  be  stricken  from  the  roll  of 
members,  "  and  of  this  he  shall  be  duly  notified  by  the  secre- 
tary;  "  and  imposes  upon  the  treasurer  tlie  duty  of  serving,  on 
or  about  March  1,  of  each  year,  upon  every  member  in  arrears, 
a  written  notice,  calling  his  attention  to  the  foregoing  reipiire- 
ment.  It  is  further  declared  that  "  the  first  regular  meeting 
in  April  of  each  year,  shall  be  the  regular  meeting  for  the 
revision  of  the  roll  of  members,"  at  which  the  treasurer  is 
required  to  report  "  the  names  of  all  members  whose  dues  for 
the  year  have  not  been  paid,"  and  all  such  names  "  slmll  be 
immediately  stricken  from  the  roll.''  The  treasurer  is  declared 
to  be  "  personally  resj^onsible  to  the  society  for  the  dues  of  all 
defaulting   members  not  so  reported."     It  further  ju-ovides 

'  Commonwealth  V.  Pennsylvunia  141;  Soe  also  Sibley  v.  Carteret 
Benelicial  lustitution,  2  Sar.  &  Kep.     Club,  40  N.  J.  L.  296. 


334  ASSESSMENTS.  [Chap.  14,  §312. 

that  the  treasurer  "  shall  report  to  the  society,  at  the  annual 
meetin<r  for  the  revision  of  the  roll,  a  written  statement  of  the 
names  for  members  who  are  in  arrears  of  the  dues  of  the  year, 
so  that  they  may  be  stricken  from  the  roll ;  but  this  written  state- 
ment shall  not  be  spread  upon* the  minutes."  Another  article 
provided  in  detail  for  the  order  of  business  at  what  is  des- 
ignated as  "  the  regular  meeting  for  the  revision  of  the  roll," 
specifying,  inter  alia.  "  the  treasurer's  report  of  members  in 
arrears  "  and  the  "  revision  of  the  roll  by  the  secretary."  It 
is  also  declared  that  "  any  one  of  these  orders  of  business  may 
be  suspended  at  any  time  by  the  vote  of  a  majority  of  the 
members  present  at  any  meeting." 

In  construing  these  several  provisions  in  pari  materia,  as 
they  should  be  construed,  the  Supreme  Court  of  Alabama  held 
that  the  non-payment  of  annual  dues  by  a  member,  by  the 
first  meeting  in  April,  is  not,  ipso  facto,  a  forfeiture  of  mem- 
bership, but  only  a  ground  of  forfeiture,  in  the  nature  of  a 
judgment  nisi,  to  be  made  final  by  the  vote  of  the  society; 
that  where  no  statement  or  report  had  been  made  by  the 
treasurer  at  the  regular  meeting  in  April,  as  required  by  the 
constitution,  and  no  vote  of  the  society  had  been  taken  on  the 
subject,  the  mere  reading,  at  that  meeting,  of  the  name  of  a 
member  from  a  book  as  a  delinquent,  did  not  operate  to  forfeit 
his  membership;  that  the  action  of  a  society  at  a  subsequent 
meeting,  of  which  such  delinquent  had  no  notice,  actual  or 
constructive,  declaring  a  forfeiture  of  his  membership  for  non- 
payment of  dues,  was  irregular  and  not  binding  on  him,  and 
on  his  application,  mandamus  would  lie  to  vacate  it,  and  restore 
him  to  membership.' 

§  313.  Same  subject  continued.  The  laws  of  the 
society  provided  that  members  should  pay  their  assessments 
within  thirty  days  after  notice,  and  the  society's  record  showed 
a  suspension  before  the  expiration  of  that  time.  There  was 
no  other  evidence,  and  the  court  held  that  such  suspension 
afforded  no  proof  of  the  non-payment  of  an  assessment,  nor  of  _ 
any  default  of  the  member.  There  being  no  evidence  of  the 
non-payment  of  an  assessment,  the  member  could  not  be  held 
to  be  in  default  by  reason  of  having  made  no  application  for 
reinstatement,  under  rules  wholly  applicable  to  suspension  for 
the  non-payment  of  assessments.' 

1  Medical  Society  v.  Weatherly  75  "^  Lazensky  v.  Supreme  Lodge  K. 
Ala.  248.  of  H.,  31  Fed.  Rep.  593. 


Chap.  14,  §314.]  assessments.  335 

Forfeiture  of  membership  for  non-payment  of  assessment 
cannot  be  declared  nunc  pro  tunc  after  the  loss,  if  the  policy 
was  in  force  when  the  loss  took  place,  and  a  member  cannot 
be  suspended  after  his  death,  for  non-payment  of  assessments, 
so  as  to  avoid  a  policy  in  force  at  the  time  of  his  death.' 

The  charter  of  a  society  provided  that,  if  a  member  did  not 
pay  his  assessment  within  thirty  days  after  demand,  his  insu- 
rance might  be  suspended  by  the  secretary  or  board  of  direc- 
tors, but  if  suspended  by  the  secretary,  appeal  might  be  made 
to  the  board  of  directors  when  in  session,  and  it  was  held  that 
such  forfeiture  could  not  properly  be  imposed  as  an  ex  ijarte 
result  of  mere  default  in  payment,  and  without  giving  the  as- 
sured an  opportunity  for  hearing.' 

§  313.  Same  subject  continued.  S.  was  a  member 
of  a  subordinate  lodge  of  Independent  Foresters,  and  thereby, 
by  the  constitution  and  by-laws,  became  a  member  of  the 
grand  lodge.  The  death  assessments  were  required  to  be  col- 
lected by  the  subordinate  lodge,  and  forwarded  to  the  grand 
lodge,  the  subordinate  lodge  being  compelled  to  account  for 
these  assessments,  and  pay  them  to  the  grand  lodge,  unless  the 
member  had  been  expelled  or  suspended.  The  assessment  of 
S.  was  paid  by  the  subordinate  lodge  to  the  grand  lodge,  but, 
at  the  time  of  his  death,  had  not  been  paid  by  him  to  the 
subordinate  lodge.  The  by-laws  provided  that  "any  member 
failing  to  pay  his  assessment  within  thirty  days  shall  be 
suspended,"  and  also  provided  that  notice  should  be  given  to 
the  grand  secretary  of  the  grand  lodge. 

On  the  death  of  S.  his  widow  brought  suit  for  the  amount 
due  from  the  grand  lodge,  and  the  court  held  that  the  mere 
non-payment  of  assessment  did  not  of  itself  operate  as  a  sus- 
pension, nor  did  the  clerical  act  of  the  secretary  in  marking 
S.'s  account  suspended.  The  suspension  must  be  by  some 
affirmative  act  of  the  lodge.  Such  suspension  may  be  waived 
by  the  lodge,  either  expressly,  or  by  failure  to  act.  The  grand 
lodge  having  received  the  assessment,  was  liable  to  the  widow.^ 

§  314.  AVlien  affirmative  act  of  the  society  de- 
claring- forfeiture  is  not  re<iuired.  However  abhorent 
it  may  be  to  all  reason  to  permit  ithe  expulsion  of  a  member, 

'  Olmstead  v.  Farmcn-'s  IVrutual,  ^  Scheu  v.  Grand  Lodge,  etc.,  17 
etc.,  50  Mich.  200;  Baker  v.  Ciuzens  Fed.  Re]).  214;  see  Hall  v.  Supreme 
Mutual,  51  Midi.  243.  Lodge  K.  of  IL,  24  Fed.  Rep-  -150. 

'^  Olmstead  v.   Farmer's   Mutual, 
etc.,  50  Mich.  200. 


336  ASSESSMENTS.  [Chap.  14,  §315. 

without  notice  and  hearing,  or  opportunity  to  be  heard,  for  an 
alleged  violation  of  his  duty  as  a  citizen,  or  a  corporator,  and 
notwithstanding  the  fact  that  a  by-law  [jroviding  that  on  such 
charges  a  member  may  be  expelled,  by  a  vote  of  the  society  in 
his  absence  and  without  notice,-is  illegal  and  invalid,  it  may 
be  laid  down  as  certain  that,  from  the  very  nature  of  the  plan 
of  mutual  assessment  insurance,  it  is  proj^er  for  mutual  bene- 
fit societies  to  provide  that  non-payment  of  an  assessment 
within  a  specified  time  after  notice,  shall,  ipso  facto,  work  a 
forfeiture  of  the  insurance,  and  an  expulsion  of  the  defaulting 
member.  It  is  true,  that  where  such  stringent  clauses  of  forfeit- 
ure are  made  in  the  contract,  they  are  usually  accompanied  by 
provisions  for  the  reinstatement  of  the  delinquent  member 
upon  equitable  terms,  but  such  provisions  are  not  necessary  to 
the  validity  of  the  provisions  of  forfeiture.  These  societies  de- 
pend exclusively  upon  the  payment  of  assessments  to  meet 
their  losses  and  expenses,  and  only  by  the  prompt  payment  of 
assessments  by  their  members  can  they  maintain  their  sol- 
vency and  responsibility.  The  only  practical  means  which 
they  have  of  enforcing  payment  of  their  assessments,  is 
by  forfeiting  insurance  contracts,  and  expelling  the  delin- 
quent members  for  non-payment,  and  this  power  is  necessary 
for  the  existence  of  such  societies.  To  hold  that  specific 
notice  to  the  member  must  be  given  of  the  time  and  place  at 
which  he  will  be  called  upon  to  answer  the  charge  of 
having  failed  to  pay  his  assessments  within  the  stipulated 
time,  and  that  a  judicial  act  of  the  society,  expelling  the 
delinquent  member,  is  necessary,  in  order  to  terminate  his 
rights  under  the  contract,  and  to  hold  further  that  such  pro- 
ceedings may  not  be  waived  by  express  contract  of  the  parties, 
would  be  to  extend  unduly  the  period  of  insurance  beyond  the 
time  for  which  a  consideration  had  been  paid,  would  offer  en- 
couragement to  careless  members,  and  greatly  impair  the 
ability  of  the  societies  to  carry  on  the  work  for  which  they  are 
organized. 

§  315.  Same  subject  continued.  While  it  is  com- 
petent for  a  member  of  a  voluntary  society  to  bind  himself  by 
an  agreement  that  his  membership  and  insurance  shall  be 
forfeited,  in  case  he  shall  not  pay  his  assessment  within  a  stipu- 
lated time,  and  that  such  forfeiture  shall  take  effect  at  the 
expiration  of  that  time,  without  special  or  personal  notice 
to  him,  and  without  any  act  on  the  part  of  the  society,  declar- 
ing the  forfeiture,  a  construction  leading  to  such  a  result  will 


Chap.  14,  §316.]  assessments.  337 

a  result  will  not  be  adopted  by  the  courts  unless  the  intention 
to  waive  such  notice  and  judicial  act,  is  clearly  expressed  in 
the  most  unauil)iguous  and  explicit  language.  As  observed  in 
The  People  v.  The  Medical  Society  of  the  County  of  Erie,  32 
ISr.  Y.  187,  "  the  general  policy  of  the  law  is  opposed  to  sharp 
and  summary  judgment,  where  the  party  whose  rights  are 
in  jeopardy  has  no  opportunity  to  be  heard  in  his  own  defense." 
Where  the  charter  of  a  society  provides  for  strict  forfeiture 
of  membership  and  the  beneiits  arising  therefrom,  upon  the 
failure  of  a  member  to  pay  his  dues  or  assessment,  there  is 
nothing  to  be  done  by  the  society,  in  order  to  give  effect  to  the 
failure  to  pay  them.  While  the  conduct  of  the  society  may  be 
such  as  to  waive  tlie  forfeiture,  the  forfeiture  takes  effect 
unless  it  is  waived. 

§  316.  Same  subject  continued.  Under  a  law  of 
a  mutual  benefit  society,  which  makes  the  non-payment  of 
assessments  for  a  given  period  of  time  after  notice,  operate  as 
an  expulsion,  ijjso  facto,  of  the  delinquent  member,  and  a  for- 
feiture of  his  rights  in  the  benefit  fund,  it  is  not  necessary 
that  the  expulsion  and  forfeiture  should  be  judicially  deter- 
mined by  any  judicatory  of  the  society. 

Where  the  by-laws  of  a  society  provide  that  each  member 
shall,  within  thirty  dajs  after  notification,  pay  the  secretary 
the  amount  of  the  assessment,  and  that  if  any  member  shall 
neglect  to  pay  any  assessment  within  that  time,  "  then  and  in 
such  case  such  membership  shall  cease  and  determine  at  once 
without  notice,  and  all  claims  be  forfeited  to  the  association," 
the  neglect  to  pay  an  assessment  for  thirty  days  after  notice 
thereof,  ipso  facto,  determines  the  membership  of  the  delin- 
quent." 

The  beneficiary  of  a  member  of  a  mutual  benefit  society, 
who,  at  the  time  of  his  death,  stands  suspended  for  non-pay- 
ment of  assessments  by  operation  of  the  laws  of  .the  society, 
cannot  recover  on  the  benefit  certificate  on  the  ground  that  a 
subordinate  lodge  of  the  society,  of  which  he  was  a  member, 
had  continued  to  treat  him  as  a  member,  and  to  treat  his  un- 
paid dues  to  the  su])reme  lodge  as  dues  payable  to  the  subor- 
dinate lodge  for  which  it  had  extended  him  credit.' 

'  McDonald    v.    lloss-Lewin,     29  insurance  purposes,  wliile  those  p;iy- 

Hun(N.Y.)87.  able  to  the   subordinate   lodire  were 

^  Borsraefe  V.  Supreme  Lods^e  etc.  for  local  expenses;  and  the  dues  to 

22  Mo.  App.  127.     In  this  case,  the  tlie  supreme  lod<:;e  were  not  paid  by 

dues  payable  to  the  supreme   lodge,  the  subordinate  lodge    for    the   de- 

22  the  mutual  benefit  society,"\vere  for  ceivsed  member. 

2!e 


338  ASSESSMENTS.  [ClIAl*.  14,  §317. 

Where  the  bv-la\vs  of  a  society  provide  that,  in  case  of  fail- 
ure or  neglect  of  a  member  to  pay  an  assessment  within  a 
stipulated  time,  "  his  name  shall  be  erased  from  the  roll  of 
members,  and  he  shall  forfeit  all  claims  upon  the  association," 
and  a  member  does  not  pay  within  the  time  limited,  he  at 
once  ceases  to  be  a  member,  and  forfeits  all  claim  upon  the 
society  by  operation  of  the  by-law.' 

Where  the  laws  of  a  society  provide  that,  if  a  member  neg- 
lects or  refuses  to  pay  an  assessment  within  a  specified  time, 
he  shall  cease  to  be  a  member,  and  the  secretary  shall  strike 
his  name  from  the  roll,  such  laws  are  self-executing,  and  the 
member  so  omitting  to  pay  loses  his  right  as  a  member, 
although  the  secretary  does  not  strike  his  name  from  the 
roll.-^ 

§  317.  Same  subject  continued.  The  provision  in 
the  charter  of  a  mutual  beneiit  society,  that  "  any  member  fail- 
ing to  pay  his  annual  due  or  assessment  within  thirty  days 
after  notice  has  been  served  on  him,  or  sent  to  him,  shall  for- 
feit his  membership,  and  all  benetits  arising  therefrom  "  is  not 
self-executing  in  the  sense  that  the  failure  to  pay  "  is  equiva- 
lent to  a  formal  withdrawal  or  resignation  at  the  expiration  of 
the  thirty  days  next  after  notice  to  pay  an  assessment,"  and 
a  severance  of  all  relations  between  the  member  and  the  soci- 
ety, which  precludes  a  waiver  of  the  forfeiture  In  such  a 
case,  the  society  may  waive  the  forfeiture.' 

Where  a  certificate  of  membership  in  a  society,  which  pro- 
■^ides  for  paying  a  certain  sum  of  money  on  the  death  of  a 
member,  also  requires  the  party  to  pay  all  assessments  against 
him  within  ten  days  after  notice  thereof,  or  the  certificate  shall 
be  null  and  void,  and  the  by-laws  of  the  societ}^  provide  that 
a  party  failing  to  pay  his  assessments  within  ten  days  after 
notice  shall  forfeit  his  membership  and  all  benefits  therefrom, 
and  the  party,  in  his  application  for  membership  agreed  to  be 
bound  by  the  rules  and  regulations  of  the  society,  a  failure  or 
neglect  to  pay  an  assessment,  within  ten  days  after  notice  of 
the  same,  will  prevent  any  recovery  upon  the  certificate  after 
his  death.^ 

Where  a  certificate  of  membership  provides  that  the  benefit 

'  Yoe  V.  Mut.  Benevolent  Ass'n.  63  Ky.;  8  Kv-  L.  Rep.  101 ;  .Johnson  v. 

Md.  86.  The  Southern  Mutual  etc.  79   Ky. 

■^  Rood  V.  Railway  Passenger,  etc.  404. 

Ben.  Ass'n,  31  Fed.  Rep.  62.  *  Benevolent  Society  v.   Baldwin, 

'  American  Mut.  Aid  Soc.  v.  Quire  86  111.  479. 


Chap.  14,  §319.]  assessments.  339 

fund  shall  be  paid  to  the  beneficiary,  in  case  of  the  member's 
death,  on  condition  "  that  he  has  complied  with  the  by-laws 
of  the  society,''  and  the  by-laws  provide  that  members  shall 
forfeit  their  membership  if  they  fail  to  pay  their  assessments 
within  thirty  days  after  publication  thereof;  and  where  it 
appears  from  the  evidence  that  the  assured  had  failed  to  pay 
an  assessment  within  the  time  sjieciiied,  and  that  it  remained 
unpaid  at  the  time  of  his  death,  the  assured  has  forfeited  his 
membership,  and  the  beneliciary  cannot  recover  under  his  cer- 
tificate.' 

§  318.  Same  subject  coutinuetl.  In  a  certificate 
of  membership  in  a  mutual  benefit  society  the  member  agreed 
"  to  make  a  deposit  of  twelve  dollars,  (two  assessments),  and 
renew  the  same  when  said  deposit  has  been  consumed,  M'ithin 
thirty  days  from  date  of  written  notice,  deposited  in  the  post- 
ofhce,  in  the  City  of  New  Orleans,  State  of  Louisiana,  addressed 
in  conformity  with  his  written  address,  filed  with  the  secretary 
of  the  association."  After  the  death  of  the  member,  an  action 
was  brought  on  the  contract  of  insurance,  and  the  testimony 
of  the  secretary  and  treasurer  clearly  established  the  fact  that 
notices  were  sent  through  the  post-office,  according  to  terms  of 
the  agreement,  informing  the  deceased  member  of  tlie  con- 
sumption of  his  deposit,  and  calling  on  him  to  renew  the  same; 
and  that  the  member  failed  to  renew  the  deposit,  within  thirty 
days  from  date  of  written  notice,  etc.  Upon  these  facts  the  court 
held  that  the  failure  to  renew  the  deposit,  in  accordance  with 
the  contract,  forfeited  the  "good  standing"  of  the  member  in 
the  society,  and  constituted  a  sufficient  defense  to  the  action.^ 

§  319.     Same    subject    contiuued.     In    McMurray 

V.  Supreme  Lodge,  etc.,  20  Fed.  Hep.  107,  it  was  held  that 
"good  standing"  within  the  meaning  of  the  laws  of  the 
Knights  of  Hoiu)r,  implies  a  full  and  fair  com])liance  with 
those  laws,  in  the  payment  of  assessments  and  dues;  that  a 
member  who  is  largely  in  arrears  for  assessments  and  dues,  is 
not  "in  good  standing,"  within  the  meaning  of  his  benefit 
certificate,  and  if  he  die,  when  so  in  arrears,  his  beneficiary  is 
not  entitled  to  the  payment  of  the  benefit. 

Decision  No.  20,  made  by  the  supreme  dictator  of  the 
Knights  of  Honor  in  ISTO,  held  that,  if  a  member  fails  to  ])ay 
an  assessment,  within  thirty  days  allowed  by  the  constitution, 

'  Madeira  v.  Merchants'  etc.  Ben.  '  Zeiiiler  v.  MiUual  Aid  I'v  Ben. 
Soc,  16  Fed.  Rep.  749.  Life  Ins.  Co.,  1  McGloin  (La.)  284. 


340  ASSESSMENTS.  [Chap.  14,  §320.. 

and  dies  l)etween  the  expiration  of  the  thirty  day  and  the  next 
meeting  of  the  lodge,  his  family  or  heirs  would  be  entitled  to- 
the  death  benefit;  that  a  member  must  be  suspended  in  order 
to  forfeit  his  death  benelit,  and  cannot  be  suspended  after  his 
death.  In  McMurray  v.  Su])renie  Lodge,  etc.  supra^  the  court 
held  that  this  decision  did  not  apply  where  thedeath  of  the  delin- 
quent member  took  place  after  the  next  meeting  of  his  lodge; 
that  the  assured,  having  been  in  arrears  for  eight  assessments 
at  the  time  of  his  death,  was  not  in  good  standing,  and  that  his 
beneficiary  could  not  recover. 

This  decision  seems  to  be  contrary  to  the  principles  govern- 
ing the  forfeiture  of  rights  of  membership.  According  to  the 
decided  weight  of  authority,  some  act  of  the  society,  judicially 
declarino^  the  forfeiture  was  necessary  under  the  contract. 
The  contract  provides,  as  such  contracts  usually  do,  that  cer- 
tain benefits  will  be  paid  to  the  beneficiary  of  the  member, 
"  providing  he  is  in  good  standing  when  he  dies."  The  laws 
of  the  order  contain  the  following  provisions  upon  the  pay- 
ment of  dues,  assessments,  etc: 

"  Any  member  who  may  become  in  arrears  for  dues  or  fines 
to  this  lodge  shall  not  be  entitled  to  vote,  hold  ofhce,  nor  shall 
he  be  entitled  to  benefits;  and  when  six  months  in  arrears  for 
dues  or  fines,  or  when  he  fails  to  comply  with  section  3  of  law 
XV.,  he  shall  be  suspended  from  the  lodge." 

Law  XY.,  Sec.  3.  "  Each  member  shall  pay  the  amount 
due,  on  the  notice  of  the  reporter  of  his  lodge,  within  thirty 
days  from  the  date  of  such  notice,  and  any  member  failing  to 
pay  such  assessment  within  thirty  days,  shall  be  suspended 
from  his  lodge." 

Under  the  authorities  cited  in  the  preceding  paragraphs,' 
notice  to  the  member,  and  a  declaration  of  forfeiture  for  the 
non-payment  of  assessments  were  necessary  to  terminate  the 
"  good  standing  "  of  a  delinquent  member. 

§  320.  Same  subject  continued.  Whether  the  effect 
given  to  the  by-laws  in  the  McMurray  case,  arises  from  a  cor- 
rect, or  an  incorrect  construction,  it  is  evident  that  there  are 
two  lines  of  authorities  upon  the  construction  to  be  given  to 
provisions  of  forfeiture  of  "good  standing  "  in  mutual  benefit 
societies;  on  the  one  hand,  the  cases  of  The  Illinois  Masons' 
Benevolent  Society  v.  Baldwin,  '?<Q  111.  479;  Madeira  v.  Mer- 
chant's etc.,   Ben.  Society,  16  Fed.  Kep.  749;  McMurray  v.. 

1  Sections  307  to  313  inclusive. 


OhAP.  14,  §321.]  ASSESSMENTS.  341 

Supreme  Lodge,  etc.,  20  Fed.  Rep.  107  and  Ziegler  v.  Mutual 
Aid  6c  Ben.  etc.  Ass'n.,  1  McGloin  (La.)  284,  and  on  the 
other  hand,  the  cases  cited  in  the  preceding  paragraphs;  the 
latter  cases  holding  that  some  formal  declaration  of  forfeiture 
on  the  part  of  the  society  is  necessary  to  terminate  the  rights 
of  the  member,  and  the  former  holding  that  such  declaration 
is  not  necessary. 

§  331.  llestoratioii  after  suspension  or  forfei- 
ture. When  a  society  is  composed  of  one  grand  or  central 
body,  and  many  subordinate  and  local  councils  or  lodges,  these 
local  organizations  must,  for  most  purposes,  be  regarded  as 
the  representatives  and  agents  of  the  society,  not  of  the  mem- 
bers insured  by  it.  And  although  a  local  council  is  bound 
to  conform  all  its  proceedings  to  the  requirements  of  the  con- 
stitution and  by-laws  of  the  society,  yet  the  insured  member 
is  not  to  be  held  responsible  for  such  irregularities  of  proceed- 
ing, as  the  local  council  may  commit  in  adjudicating  or  deter- 
mining upon  his  rights  under  the  contract  of  insurance. 

When  a  local  council  is  authorized  by  the  constitution  and 
by-laws  of  a  society,  to  receive  and  pass  upon  applications  for 
restoration  or  re-admission  to  membership  in  the  society,  and 
when,  acting  upon  such  authority,  such  council  does  consider 
and  adjudicate  upon  an  application  for  restoration  or  re-ad- 
mission, restores  or  re-admits  the  applicant,  and  afterwards 
supplements  this  action  by  renewing  its  calls  upon  the  restored 
or  re-adinitted  member  for  assessment,  and  by  accepting  such 
assessments,  these  acts  of  the  society  constitute  an  estoppel, 
prohibiting  the  societ}'  from  denying  the  legality  of  the  mem- 
ber's restoration  or  re-admission,  and  subjection  to  new  assess- 
ments. 

It  cannot  with  plausibility  or  any  degree  of  liberality  be 
contended  that  the  local  council  of  the  society  is  bound,  at  the 
peril  of  a  member  who  has  been  suspended,  or  who  has  forfeited 
his  membership,  to  conduct  its  proceedinors  for  his  restoration 
or  re-admission  strictly  in  accordance  with  the  nuinner  pre- 
scribed in  the  constitution  and  by-laws  of  the  society;  that  if  it 
fail  strictly  to  observe  the  routine  thus  prescribed,  the  sus- 
])ended  or  dropped  member  is  res])onsible  for  the  irregularity; 
and  that,  if  the  local  council  varies  at  all,  in  its  proceedings 
for  restoration  or  readmission,  from  the  details  of  procedure 
set  forth  in  the  constitution  and  by-laws,  tlien,  the  restoration 
or  i-eadmission  shall  be  null  and  void.' 

'  Hoffman  v.  Supremo  Council,  35     pel,  Soc.  1214  and  cases  cited. 
Fed.  Rep.  253;  2  Herman  on  Estop- 


342.  ASSESSMENTS.  [ClIAP.  14,  §322. 

§  333.  Kestoratioii  continued.  By  the  rules  of  a 
society,  if  a  member  fail  to  pay  his  assessment  on  or  before 
the  tenth  day  of  the  following  month  after  notice,  he  shall 
stand  suspended  from  all  rights  and  privileges  in  the  society 
from  that  time.  He  may,  however,  within  three  months,  make 
application  in  writing  signed  by  him,  for  restoration,  to  be 
presented  at  a  meeting  of  his  lodge,  accompanied  by  a  sum 
equal  to  all  his  dues  and  assessments,  and  be  restored  by  a 
majority  vote  of  the  members  of  his  lodge  present  at  such 
meeting. 

A  member  was  in  default  for  not  paying  two  assessments 
on  or  before  August  10,  1885,  and  he  was  suspended  by  his 
lodge  on  August  15,  and  so  reported  to  the  grand  lodge  of  the 
society.  On  Sept.  5,  his  lodge  passed  a  resolution  that  he  be 
restored  on  payment  of  the  dues  and  assessments  charged 
against  him.  On  Sept.  20,  lie  caused  the  full  amount  of  his 
dues  and  assessments  up  to  that  date  to  be  paid  to  his  lodge, 
and  died  on  the  following  day.  The  society  refused  to  pay 
the  fund  to  his  beneficiary,  because  he  had  not  presented  to  his 
lodge  an  application  in  writing  signed  by  him,  etc. 

In  passing  upon  this  question  the  Supreme  Court  of  JS'ew 
York  says:  "  This  (the  formality  prescribed)  has  relation  only 
to  the  manner  of  bringing  his  case  before  the  meeting  of  the 
lodge.  Its  purpose  evidently  is  to  require  action  to  be  taken. 
Without  such  application  the  duty  would  not  be  imposed  upon 
it  to  act  in  the  matter.  But  tlie  lodge,  having  the  power  to 
restore  him  to  his  relation  of  member,  might,  it  would  seem, 
do  it  without  the  formality  of  a  written  application,  as  it 
would  contain  nothing  essentially  relating  to  the  inquiry 
whether  or  not  he  should  be  reinstated.  It  may  be  that  the 
subordinate  lodge  may  not  waive  the  observance  of  any  regu- 
lation of  the  grand  lodge,  which  in  its  nature  or  effect  is  sub- 
stantial. But  those  things  which  are  merely  formal  and  inci- 
dental to  the  exercise  of  the  power  vested  in  the  subordinate 
lodge  may  not  require  strict  observance  to  render  its  action 
effectual.  To  that  extent  waiver  is  incident  to  the  exercise  of 
power  possessed  in  support  of  action  taken."  The  court  held 
that,  upon  complying  with  the  requirements  of  the  resolution 
of  the  lodge,  the  member  became  again  entitled  to  the  enjoy- 
ment of  all  his  rights,  as  such,  and  that,  upon  his  death,  his 
beneficiary  was  entitled  to  the  fund.' 

'  Gaige  v.  Grand  Lodge,  15   N.  Y. 
St.  Reporter,  455. 


Chap.  14,  §324.]  assessments.  343 

§  323.  Restoration  continued.  The  by-laws  of  a 
mutual  benelit  society  provided  tliat  a  member  who  should 
fail  to  pay  an  assessment,  should  be  suspended,  but  that  a 
payment  within  three  months  should  reinstate  him.  Another 
article  of  the  by-laws  provided  for  the  action  of  the  society  in 
cases  where  members  delinquent  for  more  than  three  months 
should  desire  to  pay  arrearages,  and  obtain  restoration  of  their 
rights.  A  member  delinquent  for  less  than  three  months, 
paid  an  assessment  while  on  his  death  bed,  and  it  was  held 
that  his  rights  were  thus  restored  without  action  on  the  part 
of  the  society." 

The  constitution  of  a  society  provided  for  the  reinstatement 
of  a  member  who  had  been  suspended  for  non-payment  of  an 
assessment,  on  his  making  a  written  application,  and  on  his 
paying  arrears  of  dues  and  assessments,  if  a  majority  of  the 
ballots  cast  on  the  vote  to  be  taken  by  the  members  of  his 
lodge  on  the  question,  were  in  favor  of  his  reinstatement. 

After  default  and  suspension  the  insured  paid  his  assess- 
ment, but  the  collector  received  it  under  protest.  The  formal 
paper  requesting  reinstatement  was  demanded  of  him,  and  no 
vote  was  taken  by  his  lodge.  The  supreme  secretary  wrote 
him  that  his  lodge  could  not  reinstate  liim  without  a  medical 
examination,  and,  on  this  letter,  his  name  was  dropped  from 
the  membership.  It  was  held  that  the  ruling  of  the  supreme 
secretary  was  not  in  accordance  with  the  laws  of  the  society, 
and  that  the  suspended  member  had  been  deprived  of  a  right 
to  a  ballot,  and  to  reinstatement,  without  good  cause.'  This 
condition  in  respect  to  good  health  was  not  in  the  rule,  and 
the  officers  had  no  right  to  add  it  to  the  rule.^ 

§  324.  Restoration  eontinvied.  A  member  is  in 
good  standing  in  a  mutual  benetit  society  so  long  as  he  faith- 
fully performs  his  duty  as  a  member  of  the  society  and  regu- 
larly pays  or  tenders  his  dues  and  assessments.  The  society 
cannot  de])rive  him  of  any  rights  by  wrongfully  refusing  to 
accept  dues  and  assessments  tendered  by  him  under  the  con- 
tract of  insurance. 

A  member  of  a  subordinate  court  of  the  supreme  court  of 
the  Independent  Order  of  Foresters  was  insured,  under  tlie 
endowment  provisions  thereof,  for  $1,000.  This  court  left  the 
order   in    a  body,  and  was  consequently  suspended.      By  the 

'    Maiison    v.    Grand  Lodge,  30        ^  Dennis  v.  Benetit  Association,  14 

Minn.  Snn.                                   '  N.  Y.   St.    Reporter   (505 ;  See    also 

Mngramv.  Supreme  Council,  14     Van  llouten  v.    Pine   38  X.   J.    Eq. 

N.  Y.  St.  Reporter  600.  72. 


344  ASSESSMENTS.  [ClTAP.  14,  §325. 

rules  of  the  order  members  of  suspended  courts,  in  good  stand- 
ing at  suspension  were,  on  application  within  thirty  daj'S  to 
the  supreme  secretary,  and  payment  of  a  fee  of  $1,  to  receive 
a  card  of  membership  and  be  entitle^l  to  the  endowment,  pro- 
vided they  paid  all  assessments  -as  they  fell  due,  and  attiliated 
with  another  lodge  of  the  order;  but,  if  after  thirty  da3's,  they 
must  pass  a  medical  examination.  The  member,  ascertaining 
that  his  court  had  been  suspended  from  the  order,  and  being  then 
in  good  standing,  applied,  within  thirty  days,  to  the  supreme 
secretary  of  the  order  for  his  card  of  membership,  tendering 
$1.  and  assessments  due,  which  were  refused  on  the  ground 
that  a  medical  certilicate  was  necessary.  The  member,  by  rea- 
son of  his  not  having  the  card,  was  prevented  from  affiliating 
with  another  court,  though  he  endeavored  to  do  so.  He  regu- 
larly tendered  his  monthly  assessments  until  he  died.  It  was 
held,  on  these  facts,  that  he  died  in  good  standing,  and  that 
his  beneficiary  was  entitled  to  the  benefit  fund.' 

§  335.  Restoration  continued.  The  widow  of  a 
deceased  member  sued  a  mutual  benefit  society  for  the  benefit 
fund.  It  was  proved  in  defense  that  the  member  had  been 
regularly  suspended  for  non-payment  of  assessments;  that  the 
by-laws  of  the  society  required  that  a  member  so  suspended 
should  be  reinstated  within  six  months,  provided  he  a])peared 
in  person,  or  applied  in  writing,  and  paid  up  all  dues  to  date  of 
re-admission;  that  within  said  time  deceased  had  sent  the 
money  to  pay  up  his  dues,  but  that  it  had  not  been  accepted 
by  defendant,  and  that  deceased  had  never  appeared  in  person, 
or  applied  in  writing  for  his  reinstatement  as  a  member. 
It  was  held  that  the  defense  was  sufficient.  The  society  was 
not  obliged  to  accept  the  money  sent  by  the  member  as  long 
as  he  did  not  appear  in  person,  or  apply  in  writing.  He  was 
required  to  do  one  or  the  other,  in  addition  to  the  payment  of 
his  dues,  to  terminate  his  suspension  and  secure  his  re-admis- 
sion. The  court  had  no  power  to  i-elieve  the  member  from  the 
observance  of  this  condition,  and  his  suspension,  therefore, 
continued  to  the  period  of  his  decease,  and  necessarily  forfeited 
all  his  rights  and  privileges  as  a  member  of  the  society,  except 
that  of  being  reinstated  upon  complying  with  the  by-laws. 
The  membership  of  the  deceased  was  subject  to  the  operation 
and  effect  of  the  by-laws  of  the  society,  and  as  they  were  rea- 
sonable, it  was  the  duty  of  the  court  to  protect  the  corporation 
in  enforcing  them." 

'  Gates  V.  Supreme  Court  of  For-  '  Lehman  v.  I.  O.  B'nai  Brith,  23 
esters,  4  Ontario  535.  N.  Y.  Weekly  Dig.  409. 


Chap.  14,  §326.]  assessments.  345 


ASSESSMENTS.— Part  III. 


S  r   S^8  \  Excuse  for  non-payment— custom  of  society. 

Sec.  329.    Excuse  for  nonpayment— sickness  or  insanity — act  of  God. 

Sec.  330     Excuse  for  non-payment — Sunday,  Thanksgiving  day. 

bEc.  66  .  I  Excuse  for  non-payment — statements  and  agreements  of  offi- 

t>EC.  66i.  )      ^,gj.g  Qf  society.  ' 

Sec.  333.    Excuse  for  non-payment,  set-off. 

Sec.  334.     Recovery  of  assessments  paid  by  member. 

S  ^   Qi?  f  Assessments  retained  by  society — waiver  of  forfeiture. 

S  r    H43  I  I^^*^^^I^t  of  assessments — estoppel  in  pats. 

Sec.  344.    Effect  of  return  of  assessment  once  paid. 

S  ^   348  !'  -Attempt  to  collect  assessments — waiver  of  forfeiture. 

Sec.  349.     Promise  of  society  to  receive  past  due  assessments. 
Sec.  350.    Effect  of  levy  of  assessment  to  pay  death  loss. 

§  326.  Excuse  for  uon-payinent— Custom  of 
society.  While  it  is  sometimes  said  that  custom  is  never 
permitted  to  overcome  the  express  terms  of  a  contract,  yet  a 
custom  may  change  the  express  provisions  of  a  contract,  where 
it  has  the  necessary  elements  of  an  estoppel.  If  a  society  con- 
tinually waives  a  forfeiture,  and  this  fact  is  known  to  the 
public  and  to  the  member,  it  is  bound  by  the  custom  in  that 
regard.  Such  a  custom  must  "be  clearly  established,  and  its 
uniformity  and  duration  shown.  Isolated  instances  of  waiver 
of  forfeitui'e  are  insufficient  to  prove  a  custom,  and  cannot  be 
shown  to  overcome  or  change  the  express  provisions  of  the 
contract  of  insurance.' 

Knowledge  of  the  custom,  upon  the  part  of  tlie  member, 
must  be  shown  in  order  to  be  binding  n])on  the  society. 

The  by-laws  of  an  association  ])rovided  for  ])ayment  of  as- 
sessments within  thirty  days  after  ]n'oper  notice,  and,  in  de- 
fault thereof,  foi'  forfeiture  of  rights  of  membership.  A 
member  failed  to  pay  an  assessment  and  died.     In  a  suit  on 

'  Willcut  v.   N.  W.  Mutual,  etc.,    753;   111.  Masons  Benevolent  Soc.  v. 
81  Ind.    301;    Crossman    Adm'x.    v.     Baldwin,  80  111.  479. 
Mass.  Ben.,  etc.,  Mass.  9  N.  E.  Rep. 


346  ASSESSMENTS.  [Chap.  14,  §327. 

the  certificate  of  membership,  it  was  shown  that  it  was  the 
custom  of  the  association,  if  a  member  failed  to  pay  his  assess- 
ment after  one  notice,  to  give  him  a  second  one,  requiring  him 
to  pay  within  ten  days,  and  that  the  deceased  member  had  not 
been  given  a  second  notice.  Tlie  evidence  did  not  estabUsh 
any  knowledge  of  such  a  custom  upon  the  part  of  the  deceased, 
and  was  held  insufficient.' 

§  337.  Custom  coiitiiiued.  In  a  suit  upon  a  certifi- 
cate of  insurance,  it  was  \\e\d  that,  even  though  a  custom  of 
leniency  to  its  members,  in  receiving  assessments  after  the  stip- 
ulated time,  were  thoroughly  established,  there  was  nothing  in 
such  a  custom  as  would  prohibit  either  an  inquiry  by  the  so- 
ciety as  to  the  health  of  the  member  who  desired  to  take  ad- 
vantage of  the  custom,  or  the  refusal  of  the  money  when  tend- 
ered, if  the  health  of  the  applicant  was  so  impaired  as  to  in- 
crease the  risk.''  But  in  Stylow  v.  Wisconsin  Odd  Fellows, 
etc.,  Wis.,  34  N.  W.  Rep.  151,  the  opposite  conclusion  was 
reached  by  the  court.  In  that  case,  the  by-laws  of  the  society 
provided  that  membership  should  be  forfeited  by  failure  to  pay 
an  assessment  within  sixty  days  after  notice,  but  that  re-in- 
statement  might  be  had,  the  company  reserving  the  right  to 
exact  a  physician's  certificate  of  good  health. 

In  an  action  on  the  certificate  issued  by  the  society,  it  was 
shown  that,  at  the  death  of  the  member  holding  the  certificate, 
sixty-seven  assessments  had  been  made  against  him.  Of  these 
the  last  three  had  not  been  paid — JSTos.  17,  18  and  19.  The 
evidence  disclosed  the  fact  that  the  society  made  assessment 
No.  19  against  the  deceased  two  days  after  he  was  in  default 
for  assessment  No.  17,  for  the  non-payment  of  which  the  so- 
ciety claimed  he  forfeited  all  rights  under  his  contract  with  the 
society.  Of  the  remaining  sixty-four  but  one  assessment  had 
been  paid  within  the  sixty  days,  and  all  payments  had  been  re- 
ceived without  demand  for  a  physician's  certificate,  though  some 
payments  were  made  one  hundred  days  late.  The  court,  in  this 
case,  says:  "  The  assured  had  every  reason  to  believe  that  the 
company  would  accept  the  payment  of  these  assessments  as  it 
had  accepted  the  payment  of  all  others,  within  a  reasonable  time 
after  they  became  due,  without  making  any  question  as  to 
his    state    of    health.     *     *     *     *     We  are  of  opinion  that 

'  Jones  et  al.  v.  Nat.,  etc.,  Ky.  2  S.        '■'  National    Mut.,  etc.,  v.   Miller. 
W.  Hep  447;  Schwarz  v.  Germanla    Ky.,  2  S.  W.  Rep.  900;  see  also  Lew 
L.  Ins.  Co.,  18  Minn.  448;   Adams  v.     is  v.  Phoenix  Mut.,  etc.,  44  Conn.  73- 
Otterback,  15  How.  539;    Taylor  v. 
.^tna  L.  Ins.  Co.,  13  Gray  434. 


Chap.  14,  §328.]  assesstotnts.  347 

after  the  constant  course  of  conduct  of  the  company  with 
the  assured,  as  shown  by  the  evidence  in  this  case,  the  only 
way  the  company  could  insist  upon  a  forfeiture  for  non- 
payment within  the  time  fixed  by  the  by-laws  would  be  by 
giving  the  assured  personal  notice  that  thereafter  punctual 
payment  would  be  required,"  ' 

§  338.  Custom  continued.  Where  the  uniform  cus- 
tom of  the  society  has  been  to  give  notice  of  the  time  when 
assessments  fall  due,  and  to  collect  the  same  at  the  residence 
of  the  member  through  a  local  agent  residing  in  his  neighbor- 
hood, good  faith  requires  that  this  mode  of  collecting  should 
not  be  discontinued,  and  payment  required  at  the  society's 
office,  without  notice  to  the  insured.'^ 

But  it  has  been  held  that  where  the  exact  time  of  payment 
is  fixed  by  the  contract,  and  the  society  has  been  accustomed 
to  notify  the  insured  in  advance  of  that  date,  and  to  urge  him 
to  be  punctual,  it  ma}^  nevertheless,  cease  to  give  such  notice 
at  any  time,  without  informing  him  that  such  notice  will  no 
longer  be  given  ^ 

If  the  practice  of  a  society  and  its  course  of  dealing  with 
its  members,  known  to  the  insured,  have  been  such  as  to 
induce  a  belief  that  so  much  of  the  contract  as  provides  for  a 
forfeiture  in  a  certain  event,  will  not  be  insisted  on,  the 
society  will  not  be  permitted  to  set  up  such  forfeiture,  as 
against  one  in  whom  their  conduct  has  induced  such  belief.' 

It  is  a  well  settled  and  salutary  rule  of  law,  that  a  party 
cannot  insist  upon  a  condition  precedent,  when  its  non-per- 
formance has  been  caused  bv  himself." 

In  Ilelme  v.  Phila.  Life  Ins.  Co.,  61  Pa.  St.  107,  plaintiff 
offered  on  the  trial  to  prove  a  custom  among  life  insurance 
companies,  to  allow  thirty  days  of  grace  for  payment  of  pre- 
miums, even  where  a  clause  of  forfeiture  for  non-payment  on 
a  time  certain  existed,  and  the  court  held  that  the  testimony 

'  See  Insurance  Co.   v.   Hinesley,  U.   S  252;  Mutual  Firo    Ins.    Co.   v- 

75Ind.  1.  Miller,  58  Md.  4()3;  Mande.i,^)  V   Lifo 

'^  Ins.  Co.  V.  Bernard,  33  Ohio    St.  Association,    G4    Iowa    134,    distin- 

459;    Seamans  v.   N.  W.  Mut.  Life,  "juishing  Phoenix   Mut.    v.    Uoster, 

3  Fed.  Rep.  325;    Hanlev    v.    Life  106  U.  B.  30. 

Ass'n.  etc.,  G9  Mo.  :^80;  lUinois   Ins.  •«  Ins.  Co.  v.  McCain,  96  U.   S.   84; 

Co.  V.  Stanton,  57  111.  354;  Bonton  v.  Ins.  Co.  v.  WollT.  95  U.  S.   320;    Ins. 

Mut.  Life,  etc.,  25  Conn.  542;  White  Co.  v.  Ecgleston,  96  U.   S.  572:  Ins. 

V  Conn.  Ins.    Co.,    120    Mass.    330;  Co.  v.  Pierce.  75  111.   426;    Bradwell 

]Mevor  V.  Knickerbocker  Life,   etc.,  v.  Ins.  Co.,  75  N.  ('.  8;  Thompson  v. 

51  How.  267.  Ins.  Co.,  52  Mo.  469. 

^Thompson  V.  Insurance  Co.    104  *  Young  v.  Hunter,  6  N.  Y.  207. 


34S  ASSESSMENTS.  [Chap.  14,  §329. 

should  liave  heen  admitted.'     The  contrary  doctrine  has  been 
held  in  several  cases. ^ 

A  condition  in  the  contract  of  insurance  issued  by  a  mutual 
benefit  society,  providing  that  a  failure  to  comply  with  the 
rules  of  the  society  as  to  payments  shall  render  the  certificate 
void,  is  not  waived,  as  to  future  payments,  by  the  fact  that 
the  officers  have  reinstated  the  insured  member  when  he  has 
failed  to  make  payment  according  to  the  rules  of  the  society; 
especially  when  another  rule,  which  is  a  ]>art  of  the  contract, 
permits  the  officers  to  so  reinstate  a  member,  on  payment  of 
arrears,  for  any  valid  reason.^ 

§  339.  Excuse  for  non-payment,— insanity,  act 
of  God.  Where  there  is  no  provision  of  the  contract  of  insur- 
ance, which  declares,  either  expressly,  or  by  necessary  impli- 
cation, that  sickness,  insanity  or  similar  incapacity  shall  excuse 
the  non-payment  of  a  premium  on  the  day  it  is  due,  the  courts 
cannot  grant  relief  against  such  contingencies.'' 

The  case  of  Hillyard  v.  Mutual  Benefit  Life  Insurance 
Company,  25  N.  J.  Law  415,  holds  that  a  failure  to  pay  a 
premium  on  the  day  fixed  may  be  excused,  if  the  failure 
occurred  through  no  fault  of  the  insured,  but  by  the  act  of  the 
h\w,  or  the  act  of  God.  But  this  doctrine  is  not  in  harmony 
with  the  adjudicated  cases  upon  this  subject.' 

It  is  a  general  rule  that  sickness,  insanity,  or  similar  inca- 
pacity on  the  part  of  the  member  will  not  excuse  the  non-pay- 
ment of  an  assessment  within  the  stipulated  time."  But  the 
charter,  constitution,  by-laws,  or  certificate  of  membership  may 
contain  provisions  qualifying  this  rule,  although  not  stating 
the  qualification  in  express  language.  Thus,  a  rule  of  a 
society,  creating  the  annulment  of  the  contract  of  insurance 
for  non-payment  of  an  assessment,  also  provided  that  "  for 
valid  reasons  to  the  officers  of  the  association  (such  as  a 
failure  to  receive  notice  of  an  assessntent)  he  (the  default- 

■  Ruse  V.  Mut.  Ben.  etc.   36   Barb.  Co.,  83  N.  Y.  543;  16    Hun  (N    Y.) 

(N  Y  )  556 ;  34  N.  Y.  653 ;  Mayers  v.  317. 

Mutual  etc.  Ins.  Co.  38  Iowa  304.  *  See  Bliss  on   Life   Insurance  at 

'  Mutual  Benefit  etc.    v.    Ruse,    8  section    179;     See    also    Howell    v. 

Ga.  534;  Ins.  Co.  v.  Sefton,   53   Ind.  Knickerbocker  Life  Ins.   Co.,  44  N. 

380 ;  Lewis  v.  Phoenix  Mutual  etc.,  Y.  376. 

44  Conn.  72.  *  Hawkshaw  v.    Supreme   Lodge, 

'  Crossman  V.  Benefit   Association,  39  Fed.  Rep  770;   Yoe    v.    Benevo- 

Mass. ;  9  JST    E.  Rep.  753.  lent  Association,  63  Md.  86 ;  Ingram. 

■»  Klein  v.  Insurance  Co.,  104  T.  S.  v    Supreme   Council,   14  N.   Y.  St. 

88;  Thompson  v.  Insurance  Co.,  104  Reporter  600. 
IJ.   S.  253;    Wheeler    v.    Insurance 


Chap.  14,  §331.]  assessments.  349 

ing  member)  may  be  reinstated  by  paying  the  amount 
of  arrearages."  On  February  12,  1886,  the  deceased  received 
notice  of  an  assessment;  and  on  March  8, 1886,  he  was  stricken 
with  apoplexy  and  died,  without  having  paid  it. 

The  Supreme  Court  of  New  York  lield  that  his  sudden  ill- 
ness did  not  excuse  the  non-performance  of  the  condition  of 
the  contract;  but  further  held,  Dykman  J.  dissenting,  that,  by 
reason  of  the  rule  of  the  society,  allowing  reinstatement  for 
valid  reasons,  it  was  a  question  of  fact  for  the  jury,  whether  the 
excuse  was  sufKcient,  and  that  the  right  of  the  decedent  to  have 
that  question  determined  by  a  jury,  passed  to  his  beneficiary 
upon  his  death.' 

§  330.  Excvise  for  iion-ptiyineiit  —  Suiulay, 
Thaiiksg-iviiig"  day.  A  contract  of  insurance  provided: 
"  This  policy  will  not  be  considered  in  force  if  the  premium 
remains  unpaid  beyond  thirty  days  after  becoming  due."  The 
thirty  days  expired  on  Sunday  and  the  premium  was  tendered 
on  Monday.  The  court  held  that  the  tender  was  made  in  time 
and  says:  "  The  court  is  warranted  in  saying,  that  when  from 
accident  or  mutual  error,  the  day  of  fulfilling  an  agreement 
falls  upon  Sunday,  there  is  enough  of  principle  and  authority 
to  justify  the  party  in  deferringhisperformance  to  the  Monday 
ensuing,  without  impairing  a  right  or  incurring  a  forfeiture."* 

A  statute  of  Kentucky  provides  that  Thanksgiving  day  shall 
be  treated  as  Sunday,  as  to  the  presentment,  acceptance  and 
protesting  of  notes  and  bills.  The  court  of  appeals  of  that 
state  held  that  this  statute  did  not  apply  to  other  business 
transactions  and  contracts,  and  that  the  payment  of  an  assess- 
ment should  be  made  on  Thanksmvino:  dav,  if  so  contracted, 
notwithstanding  the  statute.^ 

The  statutes  of  the  different  states  must  be  consulted  in  order 
to  determine  whether  Thanksgiving  day  is  such  a  legal  holiday 
as  will  excuse  the  non-performance  of  a  contract  to  pay  an 
assessment  falling  due  on  that  day. 

§  331.  Excuse  for  iioii-payiiieut — statonieuts 
and     ajj:Teeiiieiits     of     officers     of     the     society. 

A  director  of  a  society  called  upon  a  sick  member  who  was 
insured  in  the  society.     The  sick  member  said  to  him  that  an 

'Dennis  v.   Benefit    Association,        "Campbell  v.    IntfTuational    Life 
(N.  Y.  Sup.  Ct.)  14  N.  Y.  St.    Repor-     etc.  4  Bosw.  298. 
ter  605.  ^  National   Mutual    lien.  Ass'n.  v. 

Miller,  Ky.  2  S.  W.  Hep.  900. 


350  ASSESSMENTS.  [Chap.  14,  §332. 

assessment  was  due  on  the  following  Friday,  that  he  could 
send  out  and  borrow  the  money  to  pay  it,  but  that  he  expected 
some  money  on  the  following  Monday,  and  did  not  like  to  bor- 
row it.  lie  asked  the  director  to  pay  the  assessment  for  him, 
promising  to  repay  him  on  the 'following  Monday.  The  direc- 
tor assured  him  that  he  would  pay  it  for  him  at  once,  but 
neglected  to  do  so,  and  the  society  claimed  that  his  rights  were 
forfeited.  The  court  iield  that  the  promise  of  the  director  was 
one  upon  which  the  member  had  a  right  to  rely,  and  that  the 
member  should  be  reinstated.  ' 

The  statement  of  the  secretary  of  a  mutual  benefit  society  to 
the  insured  member,  that  he  need  not  pay  his  dues  until  certain 
charges  then  pending  against  him,  which,  if  true,  made  the 
policy  forfeitable,  were  disposed  of,  is  one  upon  which  the 
insured  has  a  right  to  rely,  and  will  excuse  the  non-payment 
of  assessments  until  that  time.^ 

The  by-laws  of  an  unincorporated  mutual  benefit  society  pro- 
vided that,  in  case  a  member,  for  failure  to  pay  an  assessment 
promptly,  had  been  dropped  from  the  society  by  the  secretary, 
the  board  of  directors  should  have  power  to  reinstate  him  on 
his  presenting  to  them  a  reasonable  excuse  for  such  failure,  and 
paying  the  sum  in  arrears.  A  member,  being  delinquent,  ap- 
peared before  them,  and  offered  a  sufficient  reason  for  his  del- 
inquency, and  the  board  refused  to  reinstate  him  because  they 
alleged  his  health  was  precarious.  Tie  died  very  soon  after- 
ward. The  court,  after  his  death,  inquired  into  and  deter- 
mined the  adequacy  of  the  reason  so  offered,  and  compelled 
the  society  to  pay  the  amount  of  insurance  to  which  such  del- 
inquent's widow  was  entitled.^ 

§  332.  Same  subject  continued.  Where  the  offi- 
cers of  a  society  circulate  a  pamphlet  among  its  members,  stat- 
ing that  thirtj^  days  grace  will  be  given  for  the  payment  of 
dues  and  assessments,  the  society  is  estopped  to  claim  a  for- 
feiture on  account  of  the  failure  to  pay  on  the  day  stipulated, 

1  Van  Houton  v.  Pine,  9  Stew,  was  that  a  director  of  the  society 
Eq.  133;  38  N.   J.  Eq.  72.  had  promised  and  assured  the  mem- 

2  Jones  V  National  Mutual  etc.  ber  that  he  himself  would  pay  the 
Ky- ;  2  S.  W.  Rep.  447 ;  Robertson  v.  assessment  due  the  next  Friday,  in 
Metropolitan  L.  Ins.  Co.,  47  N.  Y.  consideration  of  the  promise  of  the 
Superior  Ct  377.  member  to  repay  him  the  amount 

*  Van  Houten  v.  Pine,  38  N.J.  of  such  assessment  on  the  Monday 
Eq.  72;  9  Stew.  Eq.  133.  The  excuse     following. 


Chap.  14,  §334.]  assessments.  351 

where  the  member  relies  upon  such  statement,  and  fails  to  paj 
promptly.' 

Wliere  a  member  of  a  mutual  benefit  society,  relying  on  the 
promise  of  its  manao^er  to  draw  on  him  for  assessments,  and, 
being  misled  by  the  fact  that  such  drafts  had  been  twice  made 
on  him,  is  suspended  because  of  non-payment  of  an  assessment 
for  which  no  draft  was  made,  and  is  unable  to  be  re-instated 
for  the  reason  that  his  health  has  become  impaired,  the  society 
is  estopped  from  insisting  upon  a  forfeiture.'' 

A  person  having  notice  that  an  agent  with  wdiom  he  is  deal- 
ing is  acting  beyond  the  scope  of  his  authority,  cannot  hold 
the  principal.  The  promise  of  an  agent  of  a  mutual  benefit 
society  to  a  member  whom  he  owes,  that  he  will  pay  such  as- 
sessment as  may  be  made  by  the  society  and  become  debtor 
therefor  to  the  society,  is  of  itself  notice  that  the  agent  is  acting 
outside  of  his  authority;  and  the  society  is  not  bound  to  ac- 
cept the  agent  instead  of  the  member  as  his  debtor,  unless  it, 
with  full  knowledge  of  what  the  agent  has  done,  affirms  or 
ratifies  it.' 

§  333.     Excuse  for  non-paymeiit — Set-otf.     It  is 

not  a  valid  excuse,  on  the  part  of  a  member,  for  a  neglect  to 
pay  an  assessment,  that  the  society  owes  him  a  less  sum,  if  he 
does  not  offer  to  pay  the  remainder.'' 

§  334.  Recovery  of  assessment  paid  by  meiii- 
ber.  The  provisions  of  a  life-insurance  policy  are  con- 
strued and  applied  like  the  terms  of  any  other  contract,  and 
such  provisions  may  render  the  policy  void  ab  initio.  The 
risk  may  never  have  attached,  by  reason  of  misrepresentations, 
or  breach  of  warranty  of  the  assured,  without  fraud  on  his 
part.  In  such  cases,  he  may  recover  back  all  the  ])remiums 
he  may  have  paid.  Ihit  wlien  the  risk  has  attached,  ])remiums 
paid  during  the  continuance  of  the  policy  cannot  be  recovered.^ 

These  ])rinciples  are  applicable  to  assessments  in  mutual 
benefit  societies." 

Where  tlie  charter  of  a  mutual  ])enefit  society  provides  that 

'  Fowler   v.    Metropolitan  L.  Ins.  *  Hollister  v.  Quincy  Ins.  Co,  118 

Co.,  41  Ilun.  357;    Ruse   v.   Mutual.  Mass.  478. 

etc.,  Co.  ,24N.  Y.  65:J;    Ilowell  v.  '  May  on  Insurance  at  section  567; 

Knickerbocker,   etc.,   Co.,  44   N.  Y.  Bliss  on  Life   Insurance  at  section 

276  415 

"^  McCorkle  v.  Texas  Ben.  Ass'n,  *  Matt  et  al.   v.   Roman*  Catholic 

Texas.     8  S.AV.  Rep.  516.  Mut.,  etc.,  30  N.  W.  Hep.  799;  Gray 

^  Co-operative  Association  v.  Mc-  v.  National  Ben   Ass'n,  HI  Iii(1.5;3l; 

Connico,  53  Miss.  233.  11  N.  E.  Uej).  477;  see  section  306. 


352  ASSESSMENTS.  [Chap.  14,  §335. 

the  benefit  fund  shall,  upon  the  death  of  a  member,  be  paid  to 
his  widow  and  children,  they  are  entitled  to  the  fund,  altliough 
another  person  is  named  in  the  certificate  of  membership  as 
the  beneficiary,  and  has  paid  all  the  assessments  U])on  the 
certificate.  The  certificate  mu«t  be  construed  in  connection 
with  the  charter  as  a  contract  to  pay  to  the  widow  and  child- 
ren of  the  member  the  amount  of  the  insurance.  If  a  certifi- 
cate in  such  a  society  is  made  payable  to  a  creditor  of  the 
member,  it  is  not  void,  but  is  an  existing-  contract  in  favor  of 
the  member's  wife  and  children.  As  it  is  not  void,  the  credi- 
tor cannot  recover  of  the  society  the  amount  of  the  assess- 
ments which  he  has  paid  to  it,  in  consideration  of  the  insur- 
ance. Upon  the  death  of  the  member,  however,  he  is  entitled  to 
have  restored  to  him  all  that  he  has  expended  for  the  benefit 
of  the  beneficiaries  named  in  the  charter.' 

§  334a.  Where  the  provisions  of  an  act  for  a  relief 
fund  by  contributions  from  the  members  of  an  order,  such  as 
a  police  force,  cannot  be  carried  into  effect  without  compul- 
sory contributions,  and  the  courts  decide  that  such  con- 
tributions are  not  compulsory  under  the  act,  payments  made 
before  the  decision,  under  the  belief  that  they  were  compul- 
sory, or  unwillingly  and  under  protest,  should  be  refunded; 
the  object  of  the  act  having  failed,  no  benefit  under  the  act 
was  acquired  pending  the  decision.'^ 

§  335.  Assessments  retained  by  society,  waiver 
of  forfeiture.  A  society  may  not  retain  the  assessment 
paid  before  the  death  of  a  member,  and  refuse  to  pay  the  insur- 
ance to  the  beneficiary  of  the  certificate,  on  the  ground  that  it 
was  not  paid  within  the  time  stipulated  in  the  contract." 

Where,  in  an  action  upon  a  contract  of  insurance,  it  is  shown 
that  the  society  knew  for  eighteen  months  after  proof  of  death 
that  the  deceased  member  had  misrepresented  his  age  in  his 
application  for  membership,  but  had  never  at  any  time  offered 
to  rescind  or  cancel  the  contract  sued  on,  or  to  refund  the 
money  it  had  received  thereon,  i  t  will  be  held  to  have  ratified  and 
confirmed  the  contract,  and  is  estopped  from  asserting  the 
misrepresentation  as  a  defense  to  the  action.^ 

'  Gibson  v.  Ky.  Grangers'  Mut.  ^  Murray  v.  Buckley,  1  N.  Y.  Sup- 
Ben.  Society,  8  Ky.  L.   Rep.  (Sup'r,    plement,  347. 

Ct.)  520 ;  Ky.   Grangers'   Mut.   Ben.        "*  Underwood  v.   Iowa  Legion    of 
Soc.  V.   McGreeor,  ^7   Ky.  L.    Rep.     Honor,  66  Iowa  134. 
(Sup'r  Ct.)  750."  ^  Gray  v.  National  Ben.  Ass'n,  111 

Ind.  531;11  N.  E.  Rep.  477. 


Chap.  14,  §335.]  assessments.  353 

Where  a  member  of  a  mutual  benefit  society  fails  to  pay 
his  assessments  during  a  certain  year,  and  the  society,  not  dis- 
covering such  failure,  demands  and  receives  subsequent  assess- 
ments, and  retains  them  until  after  the  death  of  the  member, 
the  society  will  be  held  to  have  waived  the  forfeiture  for  non- 
payment, and  is  liable  for  the  amount  due  on  the  certifi- 
cate.' 

Assessments  may  be  retained  by  the  society  in  such  a  man- 
ner, and  under  such  circumstances,  as  to  constitute  an  act  of 
affirmance  of  the  contract  of  insurance  after,  as  well  as  before, 
the  death  of  the  member  whose  life  was  insured.' 

A  society,  after  demanding,  receiving  and  retaining,  until 
after  the  death  of  a  member,  the  amount  of  an  assessment  due 
from  him,  cannot  claim  that  the  money  was  demanded  and 
received  by  mistake,  and  that  the  certificate  is  forfeited.' 

The  right  to  a  certain  benerit  fund  was  forfeited,  in  case  the 
assured,  at  his  death,  had  not  paid  all  assessments  against  him, 
but,  after  his  death,  all  assessments  against  him  were  paid  for 
him  in  pursuance  of  authority  granted  and  a  request  made 
during  his  life  time,  and  were  by  his  local  lodge,  which  M-as 
defendant's  agent  in  the  collection  of  assessments,  received  and 
forwarded  to  defendant,  and  by  it  accepted  and  retained  until 
after  commencement  of  a  suit  for  the  benelit  fund.  These 
assessments  were  accepted  and  i-etained  with  knowledge,  on  the 
part  of  both  the  local  lodge  and  the  defendant  corporation,  of 
the  death  of  the  assured,  and  the  court  held  that  the  forfeiture 
for  non-])ayment  in  the  life  time  of  the  assured  had  been 
waived,  and  that  the  defendant  corporation  was  liable.'' 

In  Joliffe  V.  Madison  Mut.  Ins.  Co.,  39  Wis.  Ill,  it  was 
held,  that  an  acceptance  by  the  insurer  of  part  of  the  pre- 
mium on  a  lire  insurance  policy,  with  knowledge  that  the 
property  had  been  destroyed,  was  a  waiver.  In  the  o])inion, 
the  court  alludes  to  the  peculiar  terms  of  the  contract;  but  the 
waiver  is  put  distinctly  and  clearly  on  the  ground  that,  as  the 
company  had  accepted  the  cash])remium  after  the  default,  and 
notice  of  loss,  this  operated  as  a  waiver  of  the  suspension 
clause  in  the  policy. 

'  Tobin  V.  Western  Mut.  Aid   Soc.  Colin,   20    111.    App.  335;  Erdmann 

Iowa  33  N.  W.  Hep.  (5fi3 ;  Roswell  v.  v.  Mutual  Ins.  Co.  etc.  44  AVis.  376; 

Equitable  Aid  Union,  13  Fed.   Rep.  •' Hailev  e<  «/.  v.  Miit.    Hen.   Ass'n. 

840.  Iowa,  27  N.  W.  Rep.  770. 

'  Ma.snnic  Mutual  etc.  V.  Beck,   77  ^  Krdmann    v.    Mut.    Ins.    Co.   of 

Ind.  203:  JolifTe  V.  Madison    Mutual  Order   of    Herman's  Sons,  44    Wis. 

23  etc.,  *39  Wis  111;  Grand  Lodge  v.  37G.     See  t^  303. 

28 


354  ASSESSMENTS.  [Chap.  14:,  §336. 

§  336.  Same  subject  continued.  In  a  case  of 
mutual  Kre  insurance,  it  was  held  that  where  a  society  imposes 
a  forfeiture  of  the  contract,  in  case  of  loss  while  its  assessment 
is  unpaid,  but  its  local  agent  receives  the  past  due  assessment 
with  knowledge  of  a  loss,  and  forwards  it  to  the  society  with- 
out notifying  its  officers  of  the  facts;  and  the  officers  receive 
the  assessment,  and,  two  or  three  weeks  afterward,  order  the 
loss  to  be  paid  when  adjusted,  they  cannot  afterward  refuse 
payment  on  the  ground  of  the  delay  in  paying  the  assessment, 
since  they  have  waived  that  by  receiving  it  when  overdue,  and 
ordering  payment.' 

Whether  assessments  have  been  retained  an  unreasonable 
length  of  time,  and  under  such  circumstances  as  to  waive  a 
forfeiture,  is  a  question  for  the  jury  to  determine.  In  the 
absence  of  evidence  showing  that  an  administrator  of  a  deceased 
member  had  been  appointed  and  qualified  to  receive  payment 
of  assessments  paid  by  the  deceased,  and  that  the  society 
retained  such  assessments  for  an  unreasonable  time  after  such 
appointment  of  an  administrator,  and  after  learning  the  facts 
on  which  it  claims  the  policy  to  be  void,  the  forfeiture  cannot 
be  held  to  be  waived.^ 

A  certificate  of  membership  in  a  mutual  benefit  society  was 
subject  to  a  by-law  providing  that,  if  any  assessment  was  not 
paid  within  thirty  days  after  notice,  the  certificate  should  be 
forfeited.  Several  assessments  were  permitted  to  remain  unpaid 
long  after  the  thirty  days,  and  on  the  day  of  the  member's  death, 
the  person  to  whom  the  notice  of  assessment  had  been  sent 
called  on  the  local  agent  of  the  society,  and  offered  to  pay  the 
amount  of  such  assessments.  The  agent,  who  had  no  author- 
ity to  make  arrangements  in  regard  to  the  standing  of  mem- 
bers, agreed  to  accept  the  money,  and  forward  it  to  the  society, 
whose  office  jWas  twenty-eight  miles  distant,  subject  to  its  action 
in  the  matter.  In  his  report  he  said:  "If  money  is  not 
received,  must  be  refunded."  About  ten  days  afterward,  the 
society  gave  notice,  through  the  agent,  that  the  payment  would 
not  be  accepted,  and  offered  to  return  the  money.  It  was  held 
that  the  court  did  not  err  in  leaving  it  to  the  jury  to  say 
whether  the  delay  in  refusing  the  money  amounted  to  a  waiver 
of  the  forfeiture.'' 

'  Farmers'  Mutual,  etc.  v.  Bowen,  ^  United  Brethern  Mut.  Aid  Soc. 
40  Mich.  147.  v.  Schwartz,  Pa.  St.  13  Atl.  Rep.  769 

■^  Matt  V.  Roman  Catholic  Protec- 
tive Society,  Iowa,  30  N.  W.  Rep. 
799. 


<JhAP.  14,  §337.]  ASSESSMENTS.  355 

§  337.  Same  subject  coutiniiecl.  Where  a  mem- 
ber of  a  mutual  benetit  society  failed  to  meet  the  assessments 
made  upon  him,  but  subsequently  transmitted  to  the  secretary 
thereof  an  amount  of  money,  in  payment  of  all  dues  that  had 
been  demanded  of  him,  which  sum  the  society  retained  for 
four  months,  and  until  after  his  death,  without  notifying  him 
whether  the  payment  was  satisfactory  or  not,  sucli  retention 
of  the  amount  by  the  society  was  a  waiver  of  the  default,  and 
restored  him  to  membershi]>.' 

Where  the  society  retains,  and  continues  to  collect  assess- 
ments, after  its  secretary  has  knowledge  of  a  false  statement  in 
the  application,  as  to  the  age  of  the  member  insured,  the  society 
waives  the  forfeiture  of  the  insurance  contract.' 

Where  payment  of  an  assessment  on  a  certificate  of  member- 
ship was  accepted  by  the  society,  after  the  time  limited  in  the 
contract  of  insurance  for  making  such  payment  had  expired, 
and  a  receipt  was  given  therefor,  stamped  across  its  face  with 
the  words  "  Received  on  condition  that  member  is  in  good 
health,"  but  nothing  was  said  by  the  member  as  to  his  health 
after  he  had  received  the  receipt,  and  no  inquiries  relative  to 
the  condition  of  his  health  were  made  then,  or  subsequently,  by 
the  society,  the  subsequent  levy  and  unconditional  acceptance 
by  the  society  of  assessments  on  the  member,  operated  as  a 
waiver  of  the  forfeiture,  although  the  member  was,  at  the  time 
of  the  conditional  acceptance,  in  ill  health.  In  deciding  this 
•question,  the  court  said:  "  Without  expressing  any  opinion  as 
to  the  effect  of  the  retention  of  that  money  (the  assessment 
which  was  paid  after  it  was  due),  we  think  the  levy  of  the  sub- 
sequent assessments,  and  the  acceptance  of  the  money  paid 
upon  them,  amounted  to  such  a  waiver.  When  the  time  came 
for  the  levy  of  a  new  assessment,  if  Mr.  Rice's  policy  was  to 
be  treated  as  still  in  force,  he  would  properly  be  included  in 
the  assessment;  otherwise  not.  Under  this  state  of  things, 
six  other  assessments  upon  him  were  made  by  the  company; 
all  of  which  were  seasonably  paid.  There  was  no  determina- 
tion by  the  directors  of  the  company  that,  for  the  time  being, 
Mr.  Rice's  policy  should  be  treated  as  not  in  force  or  suspended, 
but  in  making  new  assessments,  so  far  as  appears,  no  pains 
were  taken,  and  no  intention  was  formed,  to  exclude  him.  No 
•condition  was  in  express  terms  annexed  to  the  levy  of  these 
new  assessments,  or  to  the  acceptance  of  the  payments  of  the 

'  Georgia  Masonic  Mutual  v.  *  Morrison  v.  Odd  Fellows  etc., 
-Gibson,  52  Ga.  640.  59  Wis.  162. 


356  ASSESSMENTS.  [CjIAP.  14,  J>33S, 

assured  upon  them.  The  company,  however,  contends  tliat 
the  condition  of  the  former  acceptance  i-eaches  forward,  and 
applies  also  to  the  later  payments;  and  that  it  is  not  bound  by 
later  assessments  which  it  made,  and  later  payments  which  it 
received  in  ignorance  that  the  assured  was  in  ill  health  at  the 
time  of  the  former  payment.  But  it  cannot  be  allowed  in 
this  way  to  imply  a  condition  in  favor  of  a  forfeiture.  It  liad 
knowledge  that  on  the  former  occasion  the  payment  had  been 
made  too  late,  and  that  the  money  had  been  accepted  with  a 
condition  annexed.  If,  before  levying  a  new  assessment,  the 
company  wished  to  know  the  particulars  as  to  Mr.  Rice's 
health,  and  thus  to  determine  whether  that  payment  was  valid 
or  not,  it  was  incumbent  on  it  to  make  inquiry.  Instead  of 
doing  so;  instead  of  notifying  him  that  it  wished  for  some 
positive  evidence  or  statement  upon  the  subject;  instead  of 
imposing  a  further  condition,  relating  back  to  the  time  of  the 
former  payment,  the  company  made  an  unconditional  call  upon 
him  for  the  payment  of  the  new  assessment.  It  acted  under 
no  deception  or  misrepresentation,  but  with  all  the  information 
which  it  cared  to  take  the  pains  to  acquire.  We  are  unal)le  to 
see  how  it  can  properly  be  held  that  the  former  conditional 
acceptance  cuts  down  the  effect  of  the  later  unconditional 
acceptance.  The  condition  related  to  the  former  payment 
alone.  Suppose  the  payment  of  the  former  assessment  had 
never  been  made  at  all;  and  the  company,  without  insisting 
upon  the  non-payment  as  a  ground  of  forfeiture,  had  levied 
new  assessments  upon  the  assured,  which  M-ere  all  duly  paid 
and  accepted  without  condition;  could  it  be  contended  that 
there  was  no  waiver  ?  An  unconditional  acceptance  of  an 
assessment  waives  all  the  former  known  grounds  of  forfeiture; 
and  this  effect  is  not  varied  or  limited  because  an  acceptance 
of  a  former  assessment  had  been  on  condition,  and  had  not 
amounted  to  such  a  waiver."  ' 

§  338.  Same  svibject  continued.  A  member  of  a 
society  forfeited  his  certificate  by  failing  to  pay  an  assessment 
due  December  7,  1882,  when  the  secretary  of  the  society  wrote 
him,  in  substance,  that  if  he  would  send  in  the  assessment  im- 
mediately, he  would  send  a  receipt  without  default.  The- 
assessment  was  not  then  paid,  but  on  the  25th  of  that  month 

'  Rice    V.    NeAv  Ensland   Mutual  Bonton  v.  Insurance  Co.,   25   Conn. 

Aid  Soc.  Mass. ;  N.  E.^Rep.  624 ;  cit-  542;  Insurance  Co.    v.    Raddin,  120 

ing  upon  the  last  proposition ;  Hodg-  U.  S.  183. 
don  V.  Insurance  Co.,  97  Mass.  144; 


Chap.  14,  §339.]  assessments.  357 

the  member  was  taken  sick,  and  on  the  31st  of  the  month  he 
died.  On  the  30th,  liowever,  at  his  request,  his  wife,  who  was 
the  beneficiary  of  his  certificate,  remitted  the  money,  and  it 
was  received,  at  the  society's  office,  January  1st.  Receipts  for 
the  assessment  were  returned  in  printed  form,  each  containing 
the  provisions  that  it  sliould  be  valid  only  on  condition  that 
the  assured  be  alive  and  in  good  health,  on  the  date  of  its  date; 
but  there  was  written,  in  the  handwriting  of  the  secretary,  on 
the  margin  of  each  receipt  the  words  "  no  default."  After  the 
society  was  informed  of  the  death  of  the  assured,  it  returned 
the  money  to  the  widow.  It  was  held,  upon  these  facts,  that 
because  the  remittance  was  not  made  immediately  upon  re- 
ceipt of  the  letter  of  December  7th,  the  offer  therein  con- 
tained to  waive  the  default,  was  at  an  end;  that,  since  the 
assured  was  not  alive  at  the  date  of  the  receipts,  they  were 
invalid  by  their  own  terms.  The  written  words  "no  default," 
not  being  repugnant  to  the  printed  conditions  of  the  receipts, 
they  must  be  construed  in  connection  with  such  conditions; 
and  the  true  meaning  is  that  there  should  be  no  default  pro- 
vided the  assured  was  alive  and  in  good  health  at  the  time  of 
their  date,' 

§  339.  Same  subject  coiitiiuied.  When  no  fraud 
has  been  practiced  by  the  insured,  in  concealing  his  state  of 
health  at  the  time  the  payments  are  made,  and  the  society 
receives  such  payments  out  of  time,  when  it  might  refuse 
payment,  and  declare  the  insurance  forfeited,  it  cannot  ac- 
cept the  money  and  keep  it,  and  still  insist  upon  a  forfeiture; 
and  where  a  receipt  for  an  assessment  has  appended  to  it 
the  following:  "It  is  hereby  understood  that  in  case  the 
assured  is  not  in  good  health,  this  receipt  shall  not  be  bind- 
ing, unless  the  money  be  paid  to  the  secretary  or  local  agent 
on  or  before  sixty  days  from  date  of  notice  of  assessment," 
the  case  is  not  altered.'^ 

Every  time  the  company  makes  an  assessment  against  the  as- 
sured, after  he  has  failed  to  pay  a  previous  assessment  within 
the  time  prescribed  by  the  rules,  it  waives  the  forfeiture  of  the 
policy  for  such  failure  to  pay,  and  admits  him  to  be  a  mem- 
ber of  the  company,  notwithstanding  such  failure.* 

'  Sorvoss  V.  The  Western  Mutual  ■''  Nat.   Mut.  Ben.,  etc.,   v.   Jones, 

Aid  Society,  67  Iowa  86.  Ky.,  April  1886;    Stvlow  v.  Wiscon- 

■'  Stvlow'  V.    Wisconsin  Odd    Fel-  sin  Odd  Fellows,  Wis.  34  N.W.  Hep. 

lows,  Wis,  :34  N.  W.  Rep.  141;    see  151. 
also  Hucklee  v    U.  S.   Ins.,  etc.,  18 
Barb.  (N.Y.)  541. 


358  ASSESSMENTS.  [Chap.  14,  §840, 

The  society  has  a  right  to  declare  the  contract  forfeited  if 
the  assessment  is  not  paid  within  the  stipulated  time,  hut 
this  forfeiture  is  for  the  benefit  of  the  association,  and  the 
levy  of  an  assessment  upon  a  delinquent  member  is  a  clear 
recognition  of  the  validity  of  t>he  policy,  and  an  acknowledg- 
ment of  his  rights  as  a  member. 

The  demand  and  receipt  of  assessments  by  a  society,  made 
with  full  knowledge  of  the  facts,  is  a  distinct  act  of  affirmance 
of  the  contract  by  the  party  entitled  to  avoid  it,  and  will  con- 
stitute a  waiver  of  the  right  to  annul  the  contract.' 

§  340.  Same  svibject.  But  after  a  policy  has  been 
forfeited,  it  cannot  be  renewed  except  by  express  agreement. 
A  waiver  never  occurs  unless  intended,  or  unless  the  act  re- 
lied on  ought  in  equity  to  estop  the  party  from  denying  it. 
After  a  policy  of  insurance  had  been  declared  forfeited  for 
violation  of  by-laws,  and  notice  of  such  forfeiture  had  been 
given  to  the  assured,  the  company  passed  a  resolution  di- 
recting an  assessment  on  all  policies  "  in  force  at  this  date," 
and  the  treasurer  assessed  the  forfeited  policy  by  mistake. 
The  assured  paid  the  assessment,  and  claimed  a  waiver  of  the 
forfeiture,  but  the  court  held  that  there  had  been  no  waiver  of 
the  forfeiture  of  the  policy."'' 

A  waiver  of  a  right  presupposes  a  knoMdedge  of  the  right 
waived,  and  is  not  to  be  inferred  from  a  merely  negligent  act, 
or  from  one  done  under  a  misapprehension  of  the  real  condi- 
tion of  the  rights  of  the  parties  at  the  time.= 

§  341.  Same  subject  continued.  The  acceptance 
by  the  treasurer,  of  the  payment  of  unpaid  assessments  made 
by  the  benehciary  after  the  death  of  the  member,  is  not  a 
waiver  by  the  society  of  any  invalidity  in  the  original  contract 
of  insurance. 

In  an  action  on  a  certificate  of    membership,  the    society 

'  Frost  V.  Saratoga,  etc.,  Ins.  Co.,  Ins.  Co.  v.   Stockbower,  26   Pa.   St. 

5  Denis  516;    Viall  v.  The  Genesee  199;    North   Berwick  v.  N.  E.  Ins. 

Mutual,  etc.,  19   Barb.  440;    Gans  v.  Co.,  52  Me.  336;    Viele  v.  Germania 

St.  Paul,  etc.,  Ins.  Co.,  48  Wis.  108;  Ins.    Co.,  26    Iowa  9;    May  on  Ins., 

Masonic  Mut.,  etc.,  v.  Beck,  11  Ind.  section  507. 

203;  Watson  v.  Centennial  Mut,  etc.,  «  Diehl  v.  Mutual  Ins.  Co.,  58  Pa. 

21  Fed.  Rep.  698.      To  same  effect  St.    443;    see  Leonard  v.   Lebanon 

see  Commercial  Ins.  Co.    v.   Spank-  Mutual,  etc.,  3  Weekly  Notes  of  Ca- 

neble,  52  111.  53;  Lycoming  Ins.  Co.  ses  527. 

V.  Barringer,  73  111.  230;  ^tna  Ins.  ^  Miller  v.  Union  Central,  etc,  110 

Co.  V.  Maguire,  51  111.  342;  Phoenix  111.  102;    Robertson  v.  Metropolitan, 

Ins.  Co.  V.  Slaughter,  12  Wall  404;  etc.,  Co..  88  N.  Y.  54. 


Chap.  14,  §342.]  assessments.  359 

defended  on  the  ground  that  the  deceased  member  had  stated 
in  his  application  tliat  he  was  fifty  nine  years  of  age,  when,  in 
fact,  he  was  sixty  four  years  of  age.  It  was  claimed  by  plain- 
tiff that  the  society,  by  its  treasurer,  had  received  of  plaintilt', 
after  her  husband's  death,  two  assessments  against  him,  made 
just  before  he  died,  and  that,  at  that  time,  tlie  treasurer  and 
some  of  the  other  officers  had  information  of  his  true  age. 
Upon  these  facts,  it  was  contended  that  the  society  had  ratified 
the  contract,  or  was  estopped  from  setting  up  such  defence. 
The  court  said:  ''We  think  this  ground  untenable.  There 
is  no  evidence  that  the  directors  had  knowledge  of  Swett's 
true  age,  prior  to  their  action  rejecting  the  plaintiffs'  claim  in 
July  1883.  Nor  is  there  any  evidence  that  the  treasurer  or  any 
other  officer  of  the  corporation,  acquired  any  knowledge  or 
information  of  the  fact,  while  in  the  discharge  of  any  official 
duty.  But  assuming  that  the  treasurer  acquired  notice  of  the 
fact  when  he  received  the  assessments,  he  had  no  power  to 
ratify  the  invalid  contract.  He  could  not  admit  a  member, 
and  thereby  make  a  contract  of  insurance,and,if  hehadnopower 
to  make  such  a  contract  for  the  corporation,  he  had  no  power 
to  validate  a  void  contract  by  any  ratification.' 

A  waiver  of  forfeiture  procured  by  false  representations  is 
void.^ 

§  343.    Receipt  of  assessments,  estoppel  in  pais. 

The  doctrine  of  estoppel  in  pais  is  based  upon  a  fraudulent 
purpose  or  fraudulent  result.  If  the  element  of  fraud  is  want- 
ing, there  is  no  esto])pel,  as  where  both  parties  were 
equally  cognizant  of  the  facts,  and  the  declarations  or  silence 
of  the  one  party  produced  no  change  in  the  conduct  of  the 
other,  he  acting  solely  on  his  own  judgment.  There  must  be 
deception  and  change  of  conduct  in  consequence.' 

The  mere  act  of  receiving  or  collecting  assessments  by  a 
society,  with  knowledge  of  an  existing  right  of  forfeiture,  will 
not  estop  the  society  from  setting  up  such  forfeiture,  unless 
the  member,  when  he  paid  the  assessments,  had  reason  fairly  to 
conclude,  from  the  acts  and  declarations  of  the  association, 
that  the  forfeiture  had  been  or  would  be.  waived,  or  uidess  the 
payment  was  made  in  a  reliance  upon  the  validity  of  the  con- 
tract of  insui-ance,  induced  by  the  acts,  declarations  or  silence 

'  Swett  V.  Relief  Societj',  78  Mp.  '  Harris  v.  Ecjuitable  etc.  Societj-, 
541 ;  7  Atl.  Rep.  394.  '  64  N.  Y.  196. 

5  Davidson  v.  Young,  38  111.  152. 


300  ASSESSMENTS.  [Chap.  14,  §343. 

of  the  society,'  Thus,  in  N.  W.  Mutual,  etc.  v.  Amerman 
119  in.  329;  10  N.  E.  Rep-.  225;  (overruling  16  111.  App.  528.) 
The  member  informed  the  company  that  he  had  changed  his 
occupation  from  clerking  to  braking  upon  a  railroad,  and  asked 
what  change,  if  any,  was  necessary  in  his  policy.  The  com- 
pany informed  him  by  letter  that  it  could  not  issue  a  permit 
for  his  occupation  as  brakeman,  but  advised  him,  as  he  did 
not  expect  to  be  in  that  business  long,  to  pay  the  premium  on 
liis  policy,  so  as  to  have  it  in  force  when  he  should  stop  braking, 
and  to  take  out  an  accident  policy  on  his  life,  while  in  that  busi- 
ness. The  assured  paid  the  premium,  and  was  killed  soon 
afterward  while  at  work  as  conductor  of  a  freight  train,  having 
been  promoted  from  brakeman  to  that  position.  The  court 
held  that  the  doctrine  of  estoppel  was  not  applicable  to  the 
receipt  of  the  premium  by  the  company  under  these  circum- 
stances,  and  that  the  company  was  not  liable. 

§  343.  Same  subject  continued.  Where  member- 
ship in  a  mutual  benefit  society  is,  by  the  by-laws,  made  to 
depend  upon  continuance  of  membership  in  a  particular 
organization,  withdrawal  from  membership  in  such  organiza- 
tion, forfeits  all  rights  in  the  society;  and  the  subsequent  levy 
and  collection  of  assessments  by  the  society  from  one  who  had 
withdrawn  from  membership  in  such  organization,  does  not 
continue  his  right  of  membership  in  such  society.  The  mem- 
ber is  as  much  bound  by  the  by-laws  as  the  society,  and  he 
cannot  claim  a  waiver  of  their  requirements  by  the  society.' 

By  the  constitution  of  a  mutual  benefit  society,  no  person 
could  be  a  member  of  it  unless  he  was  a  member  of  the  Im- 
proved Order  of  Red  Men,  and  on  failing  to  pay  his  dues  to 
the  I.  O.  R.  M.,  he  ceased  to  be  a  member  of  the  benefit 
society.  The  two  societies  were  independent,  and  had  different 
officers.  It  was  held  that  the  receipt  of  assessments  by  the 
mutual  benefit  society  in  ignorance  that  the  person  paying  them 
had  ceased  to  be  a  member  of  the  Red  Men  by  reason  of  non- 
payment of  dues,  was  not  an  acquiescence  in,  or  waiver  of,  the 
fact  that  he  was  not  a  member  in  good  standing  in  the  society; 
that  to  constitute  a  waiver  it  should,  at  least,  appear  that  the 
officers  of  the  society  knew,  or  had  notice  of  the  fact,  that  the 
person  had  ceased  to  be  a  member  of  his  tribe  when  they 
received  his  subsequent  assessments." 

Where,  after  discovering  that  a  member  has  made  misrep- 

'  Burbank  v.  Boston  Police  Relief  -  Springmier  v.  Benevolent  Asso- 
Association,  144  Mass.  434.  elation,  etc,  5  Cin.  Law  Bull.  516. 


Chap.  14,  §345.]  assessments.  3G1 

resentations  in  his  application,  a  society  continues  to  collect 
assessments,  it  thereby  waives  any  right  it  may  have  to  declare 
invalid  the  certiiicate  of  membership  obtained  by  such  misre- 
presentations.' 

If  the  society  accept  payment  of  an  assessment  after  it  has 
notice  of  a  chang-e  in  the  habits  of  the  assured,  which  by  the 
terms  of  the  policy  would  cause  a  forfeiture,  it  thereby  waives 
the  forfeiture.'' 

§  344.    Effect  of  return  of  assessment  once  paid. 

After  the  time  had  passed  for  the  payment  of  an  assessment, 
an  agent  of  the  society  called  upon  the  wife  of  a  member,  and 
collected  it  from  her,  giving  her  a  receipt  for  it.  The  mem- 
ber had  been  drowned  the  day  before,  but  neither  the  wife  nor 
the  agent  knew  that  fact.  The  officers  of  the  society  learned  of 
the  fact  before  the  money  w^as  paid  into  the  treasury,  and 
refused  to  receive  it.  The  day  after  the  member  was  buried, 
the  agent  called  upon  the  widow,  and  explained  to  her  the  facts. 
She  took  back  the  money  she  had  paid,  and  gave  up  the  receipt 
she  had  received  of  him  for  it. 

The  court  held  that  the  widow,  in  taking  back  the  money 
she  had  paid,  and  giving  up  her  receipt  therefor,  did  not  release 
her  rights  in  the  fund, — the  consideration,  $1,  the  amount  of 
tlie  assessment  returned,  being  grossly  inadequate,  as  tlie  fund 
amounted  to  $264;  that  the  consideration  of  hardship  upon 
the  society  had  no  weight,  as  it  only  lost  the  interest  on  $1 
for  a  few  days,  and  it  might  have  had  tlie  dollar  at  any  time 
by  asking  for  it.^ 

§  345.  Attempt  to  collect  assessments — waiver 
of  forfeiture.  An  assured  died  on  June  29,  without  hav- 
ing paid  a  pi-emium  which  was  payable  June  28,  on  penalty  of 
forfeiture  of  rights  under  the  contract.  After  the  premium 
was  due, — to-wit,  on  July  2,  the  company  addressed  a  letter  to 
the  assured,  which  contained  the  following:  "The  premium 
on  your  policy  fell  due  June  28.  If  you  wish  to  continue  this 
policy  in  force,  you  will  please  remit  above  amount  to  this 
office  by  return  mail  and  oblige." 

The  court  held,  in  an  action  on  the  policy,  that   this  letter 

'  Scliwarzbach  v.  Protection  Union  '  Phoenix  Mutual  etc.,  v.   Roddin, 

25  W.  Vii.  622;  Watson  v.  Centennial  7  Sup.  Ct  Rep.  500. 

Mutual  etc.,  21  Fed.  Rep.  (i98;    Hall  ^  Mutual  Relief  Society  v.  Billau, 

V.  Granite  State    Mutual   Aid   Asso-  (Superior  Court  of  ('incinnati)  3  Am. 

ciation,  N.  H.  9  Atl.  liep.  10:5;  HofP-  Law  Record  546.     See  5;336. 
man  v.   Su])reme   Council,   ;]5    Fed. 
Rep.  252. 


362  ASSESSMENTS.  [Chap.  14,  §346. 

clearly  showed  that  the  company  had  not  elected  to  forfeit  the 
policy  for  the  failure  of  appellee  to  pay  the  premiinn  when 
due,  but  that  the  right  of  forfeiture  reserved  in  the  policy  had 
been  waived."  ' 

A  mutual  benefit  society  is  estopped  from  claiming  that  a 
certificate  of  membership  has  been  forfeited,  where  it  recognizes 
its  continued  existence  by  notifying  him  that  "  it  is  now  liable 
to  immediate  suspension,  unless  prompt  attention  be  given  to 
this  notice.'^ 

In  an  action  on  a  certificate  of  membership,  it  was  shown 
that  notices  of  assessment  and  dues  of  date  of  Jan.  1,  of  dues, 
of  March  1,  and  of  May  1,  were  given  to  the  deceased  mem- 
ber, and  default  made  in  payment.  It  was  claimed  that  by  the 
default  the  deceased  member,  under  the  terms  of  the  contract, 
forfeited  his  rights  of  membership.  It  was  conceded  that,  by 
the  terms  of  the  contract,  the  society  might  have  treated  him 
as  having  forfeited  all  his  rights,  but  it  was  shown  that  a  like 
notice  of  dues  and  assessment  came  from  the  societj^'s  ofiice 
addressed  to  the  member  of  the  date  of  July  1,  following,  and 
was  taken  from  the  post-ofifice  at  his  place  of  residence  July  H, 
the  day  before  he  died.  This  notice  required  him  to  pay  $2.10 
within  thirty-five  days  and  contained  the  statement  that  "  hav- 
ing no  deaths,  we  omitted  our  usual  assessments  for  March  and 
May;  this  includes  deaths  reported  to  date."  And  it  was 
further  shown  that,  by  letter  dated  May  20,  of  the  same  year, 
the  secretary  advised  the  member  that  his  assessment  of 
January  had  not  been  paid,  and  added :  "  You  make  a  great 
mistake  in  not  keeping  up  the  insurance  *  *  *  Let  me 
hear  from  you  by  enclosed  postal  if  you  want  to  drop  out," 
After  the  death  of  Baker,  and  before  the  expiration  of  thirty- 
five  days  after  the  receipt  of  the  notice  of  July  1,  the  plain- 
tiff as  beneficiary  tendered  payment  of  all  unpaid  dues  and 
assessments,  and  the  societj'  refused  to  accept  them. 

It  was  held  that  there  was  sufiicient  evidence  to  permit  the 
jury  to  conclude  that  the  society  had  continued  the  member- 
ship of  the  deceased,  and  efifectually  waived  his  failure  to  make 
prompt  payments.^ 

§  346.  Same  subject  continued.  It  has  been  held  that 
whei'C  the  contract  relation  of  the  society  aiid  the  member  is 

'  Chicago    Life   etc.    v.    Warner,  Benefit  A^s'n,  27  N.  Y.  Weeklv  Dig. 

80  111.  411.  91 ;  See  Worden  v.   Guardian  Mut- 

'■*  Olmstead  v.   Farmers'  Mut.  etc.  iial  Life  Ins.  Co.,  39  N.  Y.  Superior 

50  Mich.  200.  Ct.  317. 

^  Baker    v.    N.   Y.   State   Mutual 


Chap,  li,  §347.]  assessments.  363 

not  wholly  dissolved  by  the  non-payment,  within  a  certain 
time,  of  the  assessment  called  for,  but  the  liability  of  the 
society  on  the  contract  of  insurance  is  merely  suspended  by 
such  non-payment,  so  lonf^  as  tlie  asssessment  remains  unpaid, 
the  society  does  not,  by  the  levy  of  a  second  or  subsequent 
assessment  during  the  period  of  a  default  in  the  payment  of  a 
prior  assessment,  and  during  the  period  of  consequent  suspen- 
sion of  liability,  remove  the  disabling  consequences  flowing  to 
a  member  and  his  beneticiary  from  his  neglect  to  pay  his 
assessment.'  The  sending  of  notices  of  assessment  after 
default,  in  such  a  case,  will  not  be  construed  into  an  acknowl- 
edgment of  liability  upon  the  contract,  and  a  waiver  of  the 
suspension,  but  will  be  held  to  be  reminders  to  the  member 
that  he  may,  under  the  contract,  revive  his  certiflcate. 

A  member  of  a  mutual  Are  insurance  company  insured  her 
property,  and  the  policy  contained  a  condition  that,  if  such 
assessments  as  were  laid  by  the  company  should  not  be  paid 
within  thirty  days  after  notice  thereof,  the  policy  should  be 
invalid  so  long  as  the  assessment  remained  unpaid.  In  June, 
1872  an  assessment  was  made,  and  notice  given  to  the  member, 
who,  however,  neglected  to  pay  it.  In  May,  1873,  another 
assessment  was  laid  on  policies  in  force  on  January  1,  1873, 
and  an  agent  of  the  company  sent  a  notice  of  both  assessments 
to  the  member.  The  property  was  destroyed  by  Are,  and  the 
member  tendered  payment  of  the  two  assessments  within 
thirty  days  after  receipt  of  her  second  notice.  The  tender 
was  refused,  and  suit  was  brought  bv  the  member.  It  was 
held  by  the  Supreme  Court  of  Pennsylvania,  that  the  act 
of  the  agent  in  sending  the  second  notice  of  assessment 
was  not  in  itself  a  waiver  of  the  suspension  of  the  policy, 
which  had  been  worked  by  the  non-payment  of  the  assessment, 
and  which  was,  under  the  contract,  to  continue  until  the 
assessment  should  be  paid.  And  the  court  also  held  that,  in 
order  to  recover,  it  Avas  necessary  for  the  member  to  further 
show  that  the  company  had  laid  the  second  assessment  on  this 
policy,  thereby  recognizing  it  as  in  force  on  January  1,  1873, 
and  authorizing  the  sendin":  of  the  notice.'' 

§  347.  Siuiie  subject  continued.  A  certificate  pro- 
vided that  a  failure  to  pay  any  assessment  within  forty    days 

'  Leonard  V.  Lebanon  Co.  Mutual  '  Leonard  v.  The  Lebanon  Mutual 

3  Weekly  Notes  of  Cases  527;  Cr.nx-  Ins.  Co.  3  Weekly  Notes    of  Cases 

ford  Co.  Mutual  V.  Cochran,  88  Pa.  527. 
St.  230. 


364  ASSESSMENTS.  [Chap,  14,  §348. 

after  notice  of  the  death  of  a  member,  should  work  a  forfei- 
ture of  the  member's  rights.  A  resohition  of  the  board  of 
directors  of  the  society  provided  that  "  the  secretary  notify  all 
those  whose  policies  have  lapsed  from  non-payment  of  assess- 
ments or  dues,  that  they  may  be  reinstated  in  the  company 
by  producing  to  the  secretary  a  certiiicate  of  good  health 
from  any  regularly  graduated  physician,  obtained  at  their 
own  expense,  and  the  payment  of  all  dues  and  assessments." 
The  member  holding  the  certificate  failed  to  pay  live  assess- 
ments made  just  prior  to  his  death.  In  an  action  on  the  cer- 
tificate the  question  was  whether  the  notices  of  these  live 
assessments,  sent  from  time  to  time  to  the  member,  were  in 
themselves  sufficient  evidence  of  a  waiver  of  the  forfeiture. 

The  Supreme  Court  of  Pennsylvania  said:  "  In  consider- 
ing this  question  regard  must  be  had  to  the  (above)  resolu- 
tion. *  *  *  It  appears  by  the  testimony  that  the  company 
acted  under  this  resolution.  The  secretary  says:  '  I  sent  the 
notices  to  members  that  they  might  be  reminded  of  their  pre- 
vious membership  and  might  reinstate  themselves,  if  possible.' 
This  evidence  was  uncontradicted.  This  company  appears,  as 
its  name  implies,  to  have  been  organized  upon  the  principle  of 
mutual  protection.  A  large  amount  of  indulgence  seems  to 
have  been  extended  to  the  members,  and  a  liberal  provision 
made  by  which  defaulting  members  might  be  reinstated.  It 
■would  be  unjust  to  the  company  if  this  liberality  should  be 
turned  against  itself,  and  assessment  notices  which  were 
intended  for  a  different  purpose  should  be  held  to  be  a  waiver 
of  a  forfeiture  in  favor  of  a  policy  holder  who  never  paid  nor 
offered  to  pay  his  dues.  We  fail  to  see  sufficient  evidence  of 
a  waiver  to  justify  the  submission  of  that  question  to  the 
jury."  ' 

§348.  Same  subject  continued.  The  unauthorized 
acts  of  the  ministerial  officers  of  a  subordinate  lodge,  cannot 
operate  to  dispense  w^ith  a  member's  duty  to  comply  with  the 
laws  of  the  supreme  lodge  in  regard  to  the  prompt  payment  of 
assessments.  A  benefit  society  is  not  estopped  from  enforc- 
ing a  forfeiture  of  a  policy  for  non-payment  of   an  assess- 

'  Mutual  Protection  Life  las.   Co. 
V.  Laury,  84  Pa.  St.  43. 


Chap.  14,  §350.]  assessments.  365 

ment  by  the  fact  that  one  of  its  sub-agents  attempted,  without 
special  authority  for  the  act,  to  collect  a  past  due  assessment.* 

§  349.  Promise  to  receive  past  due  assess- 
ments. The  promise  of  a  society  to  receive  a  past  due  assess- 
ment, made  without  any  consideration,  and  after  the  assess- 
ment is  past  due,  is  not  binding  on  it.  The  promise  of  a 
society,  to  waive  aright  of  forfeiture,  must  either  be  supported 
by  a  valuable  consideration,  or  it  must  be  made  by  or  on 
behalf  of  the  society,  while  the  member  still  has  time  and 
opportunity  to  make  payment.^ 

§  350.  Effect  of  levy  ot  assessment  to  pay 
death  loss.  The  mere  levy  of  an  assessment  by  a  society 
upon  its  members  to  pay  a  death  loss,  unaccompanied  by  any 
act  recognizing  the  validity  of  a  contract  of  insurance,  is  not  a 
waiver  of  a  forfeiture  that  has  been  worked  in  such  contract; 
and  the  fact  that,  after  the  death  of  a  member,  the  other  mem- 
bers paid  into  the  treasury  of  the  society  their  voluntary 
assessments  to  meet  the  amount  of  the  insurance,  gives  the 
beneliciary  no  additional  rights.^ 

'  Illinois    Masons'     Ben.    Soc   v.  American  Life,  etc.,  33  N.  J.  L.  487  ; 

Baldwin,  86  111.  479;   Borgraefe  v.  Wall  v.  Home  Ins.  Co..  8  Bosw.  597; 

Supreme  Lodge,  K.   of    H.,  22   Mo.  Franklin  Life,  etc.,  v.  Sefton,  53  Ind. 

App.  127 ;  Leonard  v.  The   Lebanon  380. 

Mutual,    etc.,    3   Weekly  Notes  of  -  Marvin  v.  Universal  Life,  etc.,  85- 

cases  527;  See   also    as    sustaining  N.  Y.  278;  Underwood  v.   Farmers' 

this   proposition ;     Koelges  v.   The  etc.  Ins.  Co.  57  N,  Y.  500. 

Guardian  Life  Ins.  Co.,  2  Lansing  ^  Swett  v.  Citizen  Mutual,  etc.,  78 

480;  Bouten  v.  American   Mut.  etc..  Me.  541 ;  Me.  7  Atl.  Rep.  394;  Mayer 

25  Conn.  542 ;  Ryan  v.  The   World  v.  Equitable  Reserve  Fund,  etc.,  42 

Mutual,  etc.,  41  Conn.  168;  Catoir  v.  Hun  (N.  Y.)  237. 


366  ASSESSMENTS.  [ClIAP.  14,  §351. 


ASSESSMENl?S.— Part  IV. 


Sec.  351.  J  Property  of  society  in  assessments  levied,   or  to  be  levied. 
Sec.  3.53.  -         Are  unpaid  assessments  assets  of   the   society  ? 
Sec.  353.  )         Can  payment  of  them  be  enforced'? 

^^^'  J^/  I  Interest  of  the  society  in  the  fund  collected  by   assessments. 

§  351.  Property  of  society  in  assessments  levied, 
or  to  be  levied.  Are  unpaid  assessments  assets  of 
the  society?     Can  payment  of  them  be  enforced? 

As  was  briefly  said  in  the  beginning  of  this  chapter,  it  may 
be  stated,  as  a  general  rule,  that  an  assessment  under  a  cer- 
tiUcate  of  membership  in  the  nature  of  a  policy  of  insurance 
in  a  mutual  benefit  society,  does  not  make  the  member  hold- 
ing the  certificate  a  debtor  to  the  society,  so  as  to  authorize  it, 
or  its  receiver,  or  assignee  in  bankruptcy,  to  bring  suit,  in  case 
of  neglect  or  refusal  of  such  member  to  pay  such  assessment. 
The  measure  of  the  member's  liability  is,  of  course,  to  be 
found  in  the  contract  of  insurance.  The  principle  upon  which 
this  contract  is  based,  in  mutual  benefit  insurance,  is  that  the 
members  of  the  society  shall  be  at  liberty  to  pay  assessments, 
or  not,  as  they  shall  elect;  that  membership  in  the  society  and 
contribution  for  death  losses  shall  be  merely  voluntary;  and  that 
a  member  may,  at  any  time,  sever  his  connection  with  the 
society,  and  leave  it  without  any  claim  upon  him,  and  leave 
him  without  any  claim  upon  it.  Under  such  contracts,  neither 
the  death  losses  in  the  society  nor  the  assessments  to  pay  them, 
create  any  liability  upon  the  member  to  pay.  When  such  a 
society  has  been  placed  in  the  hands  of  a  receiver  or  assignee, 
the  fact  that  death  losses  had  accrued  against  the  society  for 
which  assessments  should  have  been  made,  but  which  the 
society  neglected  to  make,  prior  to  the  institution  of  proceed- 
ings for  appointment  of  a  receiver,  or  prior  to  the  assign- 
ment, does  not  authorize  the  court  to  exercise  the  functions 
of  the  society  by  making  these  assessments.  The  amount  to 
be  assessed  to  pay  death  losses  is  not  an  asset  of  the  society.' 

'  In  re  Protection  Life  Ins.  Co.,  9 
Bissell  188. 


Chap.  14,  §353.]  assessments.  367 

§  353.     Same  subject  continued.      The  contract  of 

insurance  may  modify  this  plan,  and  provide  that  tlie  member 
shall  be  liable  for  all  death  losses  and  assessments  made  dnr- 
ing  the  time  he  is  a  member  of  the  society  and  entitled  to  the 
benefits  secured  by  such  membership.  In  such  case,  so  long  as 
he  is  a  member,  he  is  liable  for  death  losses  and  assessments, 
and,  on  his  refusal  to  pay,  an  action  may  be  maintained 
therefoi'. 

The  by-laws  of  a  society  provided  that  "  upon  the  death  of 
any  member  of  the  association,  it  shall  be  the  duty  of  the  sec- 
retary to  notify  the  member  of  the  same,  and  thereupon  each 
member  shall  within  thirty  days  after  such  notification  pay  to 
the  secretary  the  amount  required  by  the  rules  of  the  associa- 
tion," and  that  if  any  member  should  neglect  to  pay  any  assess- 
ment required  by  the  by-laws,  "  then,  and  in  such  case,  such 
membership  shall  cease  and  determine  at  once  without  notice, 
and  all  claims  be  forfeited  to  the  association."  The  court 
held  that  the  neglect  to  pay  an  assessment  for  thirty 
days  after  notice  tliereof,  ipso  facto  determined  the  member- 
ship of  the  delinquent;  that  he  was  liable  for  the  amount 
of  all  assessments  previously  made,  and  also  for  all  losses 
happening  prior  to  the  time  when  he  ceased  to  be  a  mem- 
ber, though  no  assessment  therefor  had  been  made;  that 
a  receiver  of  the  society,  appointed  in  an  action  brought  by 
the  state  to  procure  its  dissolution,  might  assess  the  mem- 
bers for  unassessed  losses,  and  bring  separate  actions  against 
each  member  to  recover  the  assessments  so  made  against  him; 
and  that  it  was  the  duty  of  the  receiver  to  distribute  the 
amounts  so  received  equitably  among  the  several  creditors  of 
the  company.' 

§  353.  Same  subject  continued.  An  application 
for  insurance  in  a  mutual  benefit  society  contained  a  provision 
that  the  contract  should  become  null  and  void  on  default  of 
payment  of  an  assessment.  It  also  contained  an  agreement  to 
pay  all  dues  and  assessments  until  the  member  should  give 
notice  of  withdrawal,  and  made  reference  to  the  by-laws  of  the 
society.  These  by-laws  required  compliance  with  the  stipula- 
tions of  the  ap])lication,  and  provided  that  the  "  member  shall 
be  held  liable  to  the  association  for  all  dues  and  assessments 
until   he  shall  have  given  notice  of  liis  desire   to  withdraw," 

'  McDonald  v.  Ross-Lewin,  29 
Hun.  87;  see  Hvatt  v.  Wait,  37 
Barb.  (N.  Y.) '29.   'See  j?  27G. 


368  ASSESSMENTS..  [ClIAP.  14,  §354. 

and  tliat,  "  in  case  of  default,"  such  membership  shall  cease 
and  determine  at  once  without  notice,  and  all  claim  shall  be 
forfeited  to  the  association.  In  construing  these  provisions  of 
the  application  and  by-laws,  the  Supreme  Court  of  New  York 
lield  that  it  was  left  optional  with  the  society  to  terminate,  or 
treat  as  terminated,  the  membership  of  one  wlio  is  in  default 
of  payment  of  dues  and  assessments,  or  to  continue  his  mem- 
bership, and  charge  him  with  liability  to  pay  dues  and  assess- 
ments until  he  gives  notice  of  his  withdrawal.' 

Where  a  member  is  liable  for  death  losses  and  assessments 
made  while  he  was  a  member  of  the  society,  such  liability  is 
an  asset  in  the  hands  of  a  receiver  of  the  society. - 

§  354.  Interest  of  the  society  in  the  fund  col- 
lected by  assessments.  It  has  frequently  been  urged  by 
counsel  in  the  adjudicated  cases  that  a  mutual  benefit  society 
is  an  agent — a  mere  machine,  for  the  collection  of  assess- 
ments, that  such  societies  have  no  interest  in  the  fund  col- 
lected by  them  upon  assessments  for  death  losses,  that  the 
fund  is  the  property  of  the  beneficiary  for  whose  benefit  it 
was  collected,  and  may  not,  for  any  reason,  or  upon  any  pre- 
text, be  withheld  from  such  beneficiary.  But  courts  have 
uniformly  held,  when  they  have  passed  upon  the  question, 
that  such  a  doctrine  is  untenable. 

When  assessments  have  been  paid  into  the  treasury  of  a 
mutual  benefit  society,  they  become,  in  a  certain  sense,  the 
property  of  the  society.  They  are  not  assets  of  the  society  to 
the  extent  that  they  are  subject  to  its  general  debts,  but  the 
amount  collected  on  an  assessment  belongs  to  the  society  for 
the  benefit  of  a  special  class  of  debtors — the  beneficiaries,  and 
is  subject  to  the  proper  disposal  of  its  officers.^ 

It  is  the  right  and  duty  of  the  society  to  protect,  from  all 
invalid  claims,  its  members  and  the  funds  in  its  hands,  for 
whatever  purpose,  and  however,  such  funds  may  have  been 

'  Baker  v.   N.    Y.   State   Mutual  In  such  cases,  the  statute  of  limita- 

Benefit  Association,  27  N.  Y.  Week-  tions  does  not  begin  to  run  until  the 

ly.  Dig.  91.  date  of  the   assessment.      Smith  v. 

'  For  necessary  averments  in  a  Ball,  Receiver,  107  Pa.  St  352;  In 
complaint  or  declaration  by  a  re-  re-Ins.  Co.  10  R.  1.42;  Bigelow  v. 
ceiver  against  a  member  for  unpaid  Libby,  117  Mass.  359;  Hope  Mutual 
assessment,  see  Downs  v.  Hammond,  v.  Weed,  28  Conn.  51 ;  Howland,  Re- 
47  Ind.  131 ;  Embree,  Receiver,  v.  ceiver,  v.  Cuykendall,  40  Barb.  320. 
Schideler,  30  Ind.  423.  The  con-  '^  In  re  Protection  Life  Ins.  Co. ,  9 
tract  is  to  pay  upon  the  happening  Bissell  188;  Fisher  v.  Andrews,  37 
of  certain  contingencies — death  of  Hun  (N.  Y.)  176.  Wilber  v.  Tor- 
member,  and  order   of  assessment,  gerson,  24  111.  App.  119. 


CilAP.  14,  §355.]  ASSESSMENTS.  369 

raised.  Even  where  the  society  acquires  a  benefit  fund  by  vir- 
tue of  an  assessment  levied  upon,  and  paid  by  its  members  for 
tlie  purpose  of  paying  a  certain  specified  death  loss,  the  society 
has  such  a  property  in,  or  relation  to  tlie  benefit  fund  that  it 
may  refuse  to  pay  tliat  claim,  and  resist  its  payment  on  the 
ground  of  its  invalidity.  The  society  is,  in  a  certain  sense,  the 
agent  of  its  members,  but  it  is  an  agent  with  special  and  de- 
fined powers  and  limitations,  and  the  true  and  obvious  construc- 
tion of  these  powers  and  limitations  forbids  the  payment  of  a 
claim  which,  for  any  reason,  is  invalid.  The  fact  that  it  has  real- 
ized the  money  by  assessment  for  the  purpose  of  paying  such  a 
claim,  under  the  impression  that  it  was,  or  might  prove  to  be, 
a  valid  claim,  is  no  waiver  of  its  duty  to  see  to  it  that  no  pay- 
ment shall  be  made,  in  case  the  claim  is,  in  fact,  illegal.  The 
duty  of  protecting  such  fund  it  still  owes  to  its  members  who 
have  paid  their  assessments  and  formed  the  fund,  trusting  to 
the  fidelity  of  the  society  to  protect  them  and  it  from  invalid 
claims.' 

§  355.  Same  subject  continued.  Where  member* 
have  paid  to  tlie  society  an  assessment  for  a  death  loss,  and  the 
officers  of  the  society  have  decided  not  to  pay  the  claim,  an 
assignment  to  the  beneficiary,  by  the  members,  of  the  assess- 
ments so  paid  by  them  to  the  society,  will  not  entitle  the  bene- 
ficiary to  any  part  of  the  fund.  After  payment  of  assessments- 
into  the  treasury  of  the  society,  the  members  can  neither 
assign  the  fund,  nor  maintain  an  action  to  recover  the  assess- 
ments.    The  society  controls  the  disposition  of  such  fund.'^ 

The  funds  of  a  society  derived  from  assessments  upon  mem- 
bers to  pay  losses  are,  in  their  nature,  trust  funds,  to  be  applied 
to  the  payment  of  such  losses.  The  application  of  such  funds 
to  the  purchase  of  the  assets  of  another  like  society,  or  to  tlie 
payment  of  losses  upon  contracts  of  insurance  of  such  other 
society,  the  risks  of  which  it  has  assumed,  is  a  misapplication 
of  them.' 

'  Mayer  v.   Equitable   Life  Asso-        ^  state  ex  rel     v.     JMonitor  etc  , 

ciation,  42  Hun  (N.  Y.)  237.  Ass'n.,  42  Ohio  St.  555 ;  Stamm  et  al. 

*  Swett   V.    Citizens'    Mutual  etc.,  v.   N.  W.  Mut.    Ben.   Ass'n.    Mich  • 

78  Me.  541 ;  7  Atl.  Kep.  394.  32  N.  W.  liep.  710. 


»* 


CHAPTER    XV. 


Action  on  the  Contract  of  the  Society.    Part  I. 


Sec.  356.    An  action  may  be  maintained  on  the  contract. 

Sec  357.  |  Right  of  a  society  to  provide  methods  for  settlement  of  claims 

Sec.  359  J  against  it. 

Sfp    SCI    [  When  courts  of  the  society  must  be  resorted  to. 

Sec  362.  [  Rules  against  common  right  must  receive  a  strict  construc- 

Sec.  3<i3.  )  tion. 

Sec.  364.  }  Authorities  holding  that  a  society  may  make  the  decision  of 

Sec  366  f  its  tribunal  final. 

Sec  367.  I  Authorities  holding  that  a  society  may  not  make  the  decision 

Sec  369  \  of  its  tribunal  final. 

s^^   07?'  (•  Limitation  as  to  time  when  action  may  be  brought. 
S  *^   070  [■  Limitation  as  to  place  where  action  may  be  brought. 

§  356.  An  action  may  be  maintained  on  the 
contract.  If  a  society,  the  contract  of  which  provides  for 
the  payment  of  sick  benelits  or  accident  indemnity  to  its  mem- 
bers, and  the  by-laws  of  which  make  no  provision  for  a  tribu- 
nal to  decide  questions  arising  between  the  society  and  its 
members,  wrongfully  refuses  to  fulfill  its  contract,  an  action  at 
law  may  be  maintained  against  it.' 

There  is  a  suggestion  in  some  of  the  opinions  in  the  books 
that  no  such  action  at  law  may  be  maintained,  and  the  case  of 
The  Black  and  White  Smiths'  Society  v.  Vandyke,  2  Wharton 
(Pa.)  313,  is  always  cited  as  sustaining  that  doctrine.  In  the 
opinion  in  that  case,  it  is  said: 

"Even  were  there  not  a  sentence  in  the  way,  payment  of  his 
stipendiary  allowance  could  not  be  enforced  by  action.  The 
society  never  consented  to  expose  itself  to  the  costs  and  vexa- 
tion of  an  action  for  every  weekly  pittance  that  might  be  in 
arrears.  *  *  *  *  The  remedy  by  action  is  therefore   miscon- 

'  Dolan  V.  Court  Good  Samaritan,  Cartan  v.  Father  Mathew  Society,  3 
128  Mass.  437;  Smith  v.  Society,  12  Daly  (N.  Y.)  20;  Kentucky  Lodge, 
Philadelphia  380;  Magee,  Admr'x  etc.  v.  White,  5  Ky.  Law.  Itep.  418. 
V.  Clayton  Lodge,  etc.,  5  Del.   453; 

(370) 


Chap.  15,  §357.]        action  on  contract.  371 

ceived."  The  sentence  which  stood  in  the  way  of  a  recovery 
in  that  case,  was  the  judgment  of  the  society  expelling  the 
claimant,  and  the  question  for  decision  was,  whether  an  ex- 
pelled member  could  collaterally  attack  tlie  rightfulness  of  his 
expulsion  in  a  suit  for  benelits  alleged  to  have  accrued  after  his 
expulsion.  The  court  was,  without  doubt,  right  in  its  conclusion 
that  such  a  collateral  attack  might  not  be  made.'  But  the  ques- 
tion of  the  form  of  action,  or  the  right  of  a  member  of  a  mutual 
benefit  society  to  sue  for  benefits  arising  out  of  the  contract  of 
membership,  was  not  before  the  court  in  that  case.  The 
opinion  therein  expressed  is  not  based  upon  reasoning;  it  is  a 
mere  assertion.  Nevertheless,  afterward  in  Toraui  v.  The 
Howard  Beneficial  Association,  where  a  member  of  a  society 
brought  an  action  to  "  recover  the  amount  of  six  weeks'  bene- 
fits as  a  sick  member,"  and  where  the  plea  was  "  non  assxirii'p- 
sit^''  it  was  held  in  the  court  below  that  the  Vandyke  case 
was  conclusive  that  such  an  action  would  not  lie,  and  a  verdict 
was  directed  for  the  defendant.  The  case  was  taken  to  the 
Supreme  Court  of  Pennsylvania,  and  was  decided  upon  another 
point.  The  ruling  of  the  court  below  was  not  considered  in 
the  decision,  although  it  was  the  only  question  discussed  by 
counsel.' 

In  Smith  v.  Society,  12  Philadelphia  380,  it  was  held  that 
these  cases  were  not  binding  upon  the  subordinate  courts  of 
the  state,  as  authorities  upon  the  proposition  that  an  action 
for  benefits  may  not  be  maintained  by  a  member  against  the 
society,  and  judgment  was  rendered  against  the  society  on 
such  a  claim. 

In  the  absence  of  provisions  to  the  contrary  in  the  contract 
of  insurance,  the  member,  or  the  beneficiary  of  a  deceased 
member  may  resort  to  the  courts,  in  the  first  instance,  to 
enforce  his  claim  against  the  society. 

§357.  Iliffht  of  a  society  to  provide  methods 
for  settlement  of  claims  iig-iiiust  it.  The  right  of  a 
society  to  provide  methods  for  i-edressing  grievances  in  all 
matters  of  discipline,  and  for  deciding  controversies  in  relation 
to  its  })roi)erty,  its  doctrine,  or  its  policy,  is  discussed  in  other 
parts  of  this  work.' 

There  is  a  conflict  of  opinion  as  to  the  extent  to  which  a 
mutual  benefit  society  may  go  in  restricting  actions  for  bene- 
fits promised  to  members  or  their  beneficiaries,  in    considera- 

'  See  sections  413,  414.  Association,  4  Barr.  (Pa.)  511). 

■•'Toram  v.  The  Uoward  Beneficial         ^S^-  S^^".  48,  Gl,  12'J,  130,  133. 


372  ACTION  ON  CONTRACT.         [Chap.  15,  §358. 

tion  of  the  payment  of  dues  and  assessments.  Some  authori- 
ties are  to  the  effect  that  such  a  society  may  provide  in  its 
contract  of  membersliip  for  a  tribunal  for  the  trial  of  any 
claim  against  it,  arising  from  its  agreement  to  pay  benelits, 
may  compel  the  claimant  to  submit  his  claim  to  the  jurisdic- 
tion of  such  tribunal ;  and  may  make  its  powers  ])lenary,  and 
its  action  final.  But  the  better  rule  seems  to  be  that  while  a 
society  which  issues  certificates  of  insurance  agreeing  to  pay 
a  certain  sum  of  money  as  a  benefit  during  a  member's  illness, 
or  upon  his  death,  in  consideration  of  his  payment  of  dues  or 
assessments,  may  not,  by  provisions  of  its  charter,  by-laws,  or 
certificates  of  membership,  create  in  advance  a  judicial  tribunal 
for  the  final  and  conclusive  settlement  of  controversies  that 
may  arise  from  its  agreements  to  pay  benefits  or  death  losses, 
yet  it  may,  by  such  provisions  or  stipulations,  create  a  tribunal 
within  the  society  for  the  trial  of  such  claims,  and  compel  a 
member  or  beneficiary  to  submit  his  claims  to  such  tribunal,  in 
accordance  with  such  provisions,  before  resorting  to  the  courts  of 
the  land.  It  is  just  and  reasonable  that  men  voluntarily  asso- 
ciating themselves  for  a  wortl^  object  should  require  of  each 
other,  in  advance,  an  agreement  that  the  internal  affairs  of  the 
association  shall  first  be  brought  before  a  body,  or  bodies  of 
men,  selected  from  the  association,  for  discussion  and  decision, 
before  they  shall  be  made  the  subject  of  litigation  in  the  public 
courts,  and  there  is  nothing  in  such  an  agreement  in  conflict 
with  a  member's  right,  under  the  constitutions  and  laws  of  the 
land,  to  appeal  to  the  courts  in  matters  pertaining  to  his  pro- 
perty, and  nothing  which  seeks  to  take  away  the  jurisdiction 
of  such  courts. 

§  358.  Same  subject  continued.  There  is  mani- 
festly a  broad  distinction  between  an  agreement  to  do  certain 
things  before  bringing  an  action,  on  the  one  hand,  and  an 
agreement  to  refer  to  arbitration,  or  to  submit  to  and  abide  by 
the  decision  of  the  courts  of  a  society,  on  the  other  hand.  An 
agreement  wdiich  merely  requires  certain  acts  to  be  done  or 
omitted  before  bringing  an  action,  not  only  does  not  attempt 
to  oust  courts  of  jurisdiction,  but  contemplates  an  appeal  to 
the  courts  after  certain  preparation.  An  agreement  to  abide 
by  the  decision  of  the  courts  of  a  society,  is  equivalent  to  an 
agreement  that  no  action  shall*  be  brought  in  the  courts  of  the 
state. 

While  specific  performance  of  an  agreement  to  do  or  omit 
certain  acts  before  bringing  suit  cannot  be  enforced,  courts  of 


Chap.  15,  §360.J        action  on  contract.  373 

law  or  equity  will  refuse  to  take  cognizance  of  a  claimant's 
rights  until  lie  has  sought  to  obtain  them,  and  has  exhausted 
his  remedies  in  the  tribunals  of  the  society.  To  hold  that  such 
societies  can  establish  judicial  tribunals  and  confer  upon  them 
powers  to  decide  finally  and  conclusively  upon  property  rights, 
even  of  its  own  members,  is  to  recognize  in  such  societies  the 
attributes  of  sovereignty;  while  to  take  away  entirely  the 
power  to  abridge  the  right  to  resort  to  the  public  courts, 
would  greatly  impair  the  usefulness  and  objects  of  these 
organizations. 

The  rule  laid  down  above  is  believed  to  be  liberal  toward 
the  objects  of  mutual  benefit  societies,  and  strictly  in  harmony 
with  the  principles  of  the  law. 

§  359.  Same  subject  contimied.  It  will  be 
observed  that  the  controverted  question  is  as  to  the  legality  of 
such  provisions  of  the  contract  as  seek  to  give  to  the  tribunals 
of  the  society  the  exclusive  jurisdiction  of  claims  arising  from 
its  contracts.  The  decision  of  the  question,  therefore,  effects  all 
societies  alike,  whether  they  be  incorporated  or  unincorporated. 
"Where  a  by-law  of  an  incorporated  society  provides  that  all 
claims  against  it,  growing  out  of  its  contracts  with  its  members, 
must  be  submitted  to  its  own  tribunals  for  settlement,  and  that 
the  decision  of  such  tribunals  shall  be  final,  the  further  question 
may  arise  as  to  whether  such  a  by-law  is  necessary  for  the 
good  government  of  the  society,  and  whether  it  is  reasonable 
that  ttie  debtor  shall  constitute  itself  the  judge  of  its  liability 
and  of  the  amount  which  it  ought  to  pay  the  creditor.  As 
this  question  has  nev^er  been  decided  in  any  of  the  adjudicated 
cases,  no  opinion  will  be  expressed  here  upon  the  subject. 

§360.  When  courts  of  society  must  be  resorted 

to.  When  the  charter,  constitution  or  by-laws  of  a  society 
require  a  member  or  beneficiary  to  first  seek  redress  within 
the  society  itself,  and  by  ap])eal  to  carry  the  question  to  its 
highest  tribunal,  he  has  no  right  to  bring  an  action  against  the 
society  in  the  courts  of  the  land,  until  he  has  exhausted  his 
remedy  in  the  courts  of  the  society.' 

It  has  been  held  that,  where  a  member  makes  a  claim  against 
a  society  for  monej'  due  upon  its  contract,  and  claims  to  stand 

'  Poultney  V.   Bachman,    31    Hun  v.  Lincoln,  129  Mass   70;  Ellison  v. 

(N.  Y.)4fl;  Lafond  v  Dooms,  81   N.  Bii^nold,  2  Jac  &  W.  505;   McAlees 

Y.  5U8;  White  V.   HrowiK'll,   2    Daly  v. 'Supromo  Sitting,  etc,  Pa.   St.;    13 

329;    Harrington  v.   Workinsimen's  Atl.  Rep.  755. 
Ben.  Ass'n,  70  Ga.  340;  Chamberlain 


374  ACTION  ON  CONTRACT.         [Chap.  15,  §360. 

in  the  relation  of  a  creditor  of  tlie  society,  or  where  the  bene- 
ficiary of  a  deceased  member  makes  a  claim  against  the  so- 
ciety for  money  due  upon  its  contract  of  insurance,  a  mere 
right  to  submit  the  claim  to  a  tribunal  of  the  society,  and  to 
appeal  from  its  decision  to  a  higher  tribunal  in  the  society, 
without  a  stipulation  that  the  claimant  must  resort  to  the 
prescribed  methods  of  procedure,  does  not  abridge  the  right 
of  the  claimant  to  appeal,  in  the  lirst  instance,  to  the  courts  to 
coerce  pajnnent,  when  payment  is  withheld. 

The  corporate  rights  of  a  member  of  an  incorporated  mu- 
tual beneiit  society  are  subject  to  the  control  of  the  corpora- 
tion, and  the  rights  of  a  member  of  an  unincorporated  society 
are  subject  to  the  will  of  the  majority,  under  the  contract  of 
membership.  It  is  only  proper  and  just,  therefore,  to  hold 
that,  when  the  society  has  legislated  upon  a  matter  con- 
cerning the  contract  of  membership,  and  the  rights  that  may 
arise  thereunder,  its  provisions  must  be  followed  by  one 
who  claims  relief  under  the  contract  of  membership.  Con- 
troversies concerning  the  discipline,  property,  government, 
dissolution,  etc.,  of  the  society,  arise  directly  from  the  con- 
tract of  membership,  and,  where  a  mode  of  deciding  contro- 
versies and  settling  disputes  in  such  matters  is  provided  for 
within  the  society,  the  prescribed  mode  must  be  pursued 
whether  the  language  used  in  prescribing  it  be  permissive  or 
mandatory.  But  the  rights  of  a  member  to  sick  benefits,  or 
accident  indemnity,  and  the  rights  of  a  beneliciary  in  the  ben- 
efit fund,  rest  upon  the  contract  entered  into  by  and  between 
the  society  and  the  member.  The  contract  of  the  society  to 
pay  beneiits  or  indemnity  is  a  different  contract  from  that  of 
membership,  although  both  contracts  are  often  embodied  in 
one.  By  the  contract  of  membership,  the  member  becomes  a 
part  of  the  society,  and  all  his  rights,  as  a  member,  are  to  be 
viewed  from  his  relation  to,  and  interest  in  the  society.  But 
in  promising  to  pay  benefits  and  indemnity  to  the  member,  or 
a  benefit  fund  to  his  beneficiary,  the  society  contracts  with  him 
as  with  a  stranger,  or,  at  least,  it  contracts  with  him  in  his 
capacity  as  an  individual,  not  as  a  member,  and  their  relations 
are  to  some  extent  antagonistic,  and  may  become  entirely  so. 
The  contract  between  the  society  and  the  insured  is  to  be  con- 
strued most  strongly  against  the  society,  and  in  favor  of  the 
insured  and  his  beneficiary,  and  where  the  contract  merely  giv^es 
to  the  insured  a  right  to  submit  his  claim  to  a  tribunal  of  the 


Chap.  15,  §362.]        action  on  contkact.  375 

society  for  adjudication,  it  will  not  be  so  construed  as  to  com- 
pel him  to  submit  it.' 

§  361.  Same  subject  coiitiiuiecl.  And  then  again, 
courts  of  justice  are  freely  open  to  those  who  seek  money  due 
them  upon  contract,  and  the  party  who  asserts  that  the  right 
to  invoke  the  aid  of  the  court  has  been  curtailed,  must  show  a 
clear  agreement  abridging  the  right.  If  a  man  has  a  legal 
right,  and  the  society  to  which  he  belongs  adds  others,  that 
of  submitting  his  claims  to  the  society  for  adjustment,  and 
that  of  appeal  to  its  superior  governing  bodies,  the  added 
rights  are  merely  cumulative;  they  are  not  exclusive.  Posi- 
tive words  only  can  take  away  an  existing  right.  Conferring 
a  right  to  pursue  a  given  course  does  not  destroy  an  existing 
right;  in  order  to  destroy  such  a  right,  proper  limiting  words 
must  be  employed.'' 

It  must  be  admitted  that  this  principle  has  not  been  kept  in 
view  in  the  reported  cases,  but  this  distinction  is  certainly  sus- 
tained by  sound  reasoning.  It  is  analogous  to  the  well-estab- 
lished general  rule  that  where  two  courts,  organized  under 
the  laws  of  the  same  state,  have  concurrent  jurisdiction  of  the 
subject-matter  of  an  action,  the  suitor  nuiy  choose  the  one  to 
which  he  will  submit  the  adjudication  of  his  rights. 

§  363.  Kules  against  coiiiinon  rig-ht  must  re- 
ceive a  strict  construction.  It  is  easy  for  a  society  to 
make  such  provisions  in  its  contract  as  it  may  deem  desirable 
and  necessary,  and  there  is  no  reason  why  such  provisions 
should  be  extended  by  construction.  When  rules  and  articles 
of  association  are  resorted  to  against  common  right,  courts  lean 
to  a  strict  construction.  A  by-law  of  a  society,  which  pro- 
vides for  a  right  of  appeal  from  the  proceedings  of  a  lodge 
"in  all  matters  of  form  required  by  the  constitution  and  laws 
of  the  order,"  does  not  a])ply  to  a  resolution  directing  that  sick 
benetits  be,  or  be  not,  paid,  but  only  has  reference  to  those 
observances  for  breach  of  which  there  may  be  trial  and  punish- 
ment.' 

One  of  the  by-laws  of  a  society  provided  that  "  ever}''  matter 
in  dis])ute  between  this  institution,  or  any  person  acting  under 
or  on  behalf  of   this   institution,  and  any  member  thereof  or 

'   See  section  165.  prerae  Council  v.  (tarriirus,  104  Ind. 

'  Bauer   v.   Sampson   Lod<?e,  102     133;  3  N.  E.  Hop.  818. 
Ind.  262;    1  N.  E.  Kep.   57   1;    Su-        ^  jiatoon  v.Wentworth,4Ciu.  Law 

Bull.  513. 


376  ACTION  ON  CONTRACT.         [Chap.  15,  §364. 

person  claiming  on  account  of  any  such  member,  shall  be 
referred  to,  and  decided  by  arbitrators  appointed  "  etc.  In 
construing  this  rule,  it  was  held  that  it  did  not  apply  to  the 
case  of  a  claim  by  the  administrator  of  a  member  for  the 
amount  of  a  certificate  of  insurance  on  the  life  of  such  mem- 
ber, and,  consequently,  that  those  provisions  were  no  answer  to 
an  action  by  an  administrator  on  the  certificate.  The  court 
says:  "The  case  of  an  executor  does  not  fall  within  this  lan- 
guage, for  he  does  not  claim  on  account  of  the  member,  but 
on  his  own  account."  * 

§  363.  Same  subject  continued.  Where  the  by- 
laws of  a  society  provide  that  the  board  of  trustees 
shall  examine  all  claims  of  members  for  sick  benefits, 
and,  if  found  correct,  shall  order  the  same  to  be  paid,  a  mem- 
ber may  not  resort  to  a  suit  at  law  for  such  benefits,  without 
giving  the  board  an  opportunity  to  examine  his  claim.'  But 
the  fact  that  the  laws  of  a  society  provide  that  any  sick 
brother  shall  report  to  the  chief  officer  of  the  society,  whose 
duty  it  shall  be  to  draw  on  the  treasurer  for  the  sum  allowed 
by  law,  if  he  is  satisfied  that  the  brother  is  entitled  to  sick 
benefits,  does  not  make  his  decision  final.  In  such  case  the 
officer  acts  merely  as  an  agent  of  the  lodge,  and  possesses  no 
judicial  authority.'' 

The  laws  of  a  mutual  benefit  society  provide  that,  on  notice 
of  the  disability  of  a  member,  a  board  of  physicians  shall 
examine  him,  and  report  to  the  supreme  council;  that  all 
proofs  for  death  or  disability  benefits  shall  be  approved  by  the 
subordinate  council;  and  that,  upon  approval  of  satisfactory 
proofs  of  a  member's  disability,  he  shall  be  entitled  to  a  benefit. 
These  provisions  do  not  give  the  subordinate  council  the 
right  to  reject  a  claim  for  either  a  death  or  disability  benefit. 
Such  a  right  will  never  be  presumed,  but  must  be  given  in 
the  clearest  and  most  explicit  terms." 

§  364.  Authorities  liolding  that  society  may 
make  decision  of  its  tribunal  final.  In  determining 
whether  the  court  would  inquire  into  the  suspension,  by  the  soci- 
ety, of  the  payment  of  weekly  benefits  to  a  member,  it  was  said 
in  Fritz  v.  Muck,  62  How.  Pr.  70;  "Can  the  right  to  recover 

'  Kelsall   V.   Tyler,  34  Eng.    L.   &  =  Ky.  Lodge  v.   White,  5  Ky.  Law 

Eq.  538.    The  decision  in  this  case  is  Rep.  418. 

placed  mainly  upon  another  ground.  ••Albert     v.     Order    of    Chosen 

^  Robinson  v.  Irish  American  etc.  Friends,  34  Fed.  Rep.  721. 
Society,  Cal. ;   7  Pac.  Rep.  435. 


■Chap.  15,  §365.]        action  on  contkact,  377 

them  be  passed  upon  liere?  Those  were  payable  in  case  of 
sickness  or  inability  to  work.  The  association,  by  its  rules, 
provided  a  means  of  ascertaining  the  circumstances  under 
which,  or  by  reason  of  which,  the  party  should  be  entitled. 
The  degree  of  sickness  or  inability  was,  in  the  very  nature  of 
the  case,  an  open  and  indefinite  matter.  How  much  departure 
from  the  standard  of  full  health  would  be  necessary,  or  what 
the  standard  should  be,  or  what  would  constitute  inability  to 
labor,  would,  in  many  cases,  be  very  difficult  to  determine  by 
any  legal  rules.  The  propriety,  therefore,  if  not  necessity,  of 
leaving  this  matter  to  be  determined  by  the  society  or  its  com- 
mittee, according  to  its  own  rules,  assented  to  by  all  its  mem- 
bers is,  to  my  mind,  very  apparent.  And  as  long  as  the  society 
and  its  committee  acted  in  good  faith,  without  fraud,  their 
■determination  should  be  deemed  conclusive."' 

The  charter  of  a  society  provided  that,  under  certain  circum- 
stances, in  case  of  sickness,  a  member  was  to  be  allowed  a  cer- 
tain sum  per  week.  "This  allowance  is  to  be  made  from  the 
time  of  his  application  in  writing  to  the  president,  whilst  so 
much  remains  in  the  funds."  In  an  action  for  beneiits  under 
the  charter,  plaintiff  introduced  the  charter,  proved  member- 
ship, sickness  and  application  to  the  president.  The  record 
does  not  state  whether  there  had  been  any  decision  on  the 
application  by  the  president,  or  the  society. 

The  Supreme  Court  of  Pennsylvania,  in  deciding  this  case, 
said:  "  The  corjwration  is  bound  by  the  fundamental  articles 
to  pay  only  when  it  is  in  funds,  and  it  has  determined  that  it 
is  not.  As  the  plaintiff  in  becoming  a  corporator  assented  to 
its  acts  prospectively  to  be  done,  according  to  the  charter  of 
its  constitution,  he  is  concluded  by  the  decision  of  his  own 
forum.  We  are  to  believe  that  the  ])roper  authorities  passed 
judicially  on  his  claim,  and  we  are  not  to  rejudge  their  judg- 
ment."'' 

§  365.  Authorities  continued.  In  Van  Poucke  v. 
Netherland  St,  Vincent  ^/(3  Paul  Society,  ]\[ich.;  6  Western 
Rep.  132;  2t)  N.  W.  Rep.  863,  it  was  held  that  a  by-law  of  a 
mutual  benefit  society,  which  invests  a  committee  with  author- 
ity to  determine  whether  a  member  claiming  to  be  sick,  is 
entitled  to  the  benefit  provided  for  in  the  by-law,  is  valid  and 
reasonable,  and  where  a  member  ajij^lies  to  the  society  for  aid, 
the  decision  of  the  committee  is  final. 

'  (But  see  Austin  v.  Searing,  16  '  Foram  v.  Howard  Beneficial 
N.  Y.  112-123,  Section  308.  Association,  4  Pa.  St.  519. 


378  ACTION  ON  CONTRACT.         [Chap.  15,  §366. 

In  Cincinnati  Lodge  I.  O.  O.  F.  v.  Littlebury,  the  Hamilton 
District  Court  held  that  the  decision  as  to  the  right  to  benefits 
under  the  by-laws  of  a  mutual  benefit  society,  made  by  the 
officer  or  body  which  the  constitution  required  should  decide 
it,  was  conclusive,  and  could  not  be  reviewed  by  the  courts.' 

Where  a  member  of  an  incorporated  mutual  benefit  society 
has  a  claim  against  the  society  for  benefits  under  its  by-laws, 
which  has  been  disputed,  and  decided  against  him  by  the 
decision  of  the  proper  tribunal  acting  under  the  general  laws 
and  by-laws  of  the  order,  "  whose  decision,"  it  is  provided, 
"  shall  be  final,"  a  court  of  law  has  no  jurisdiction  over  an 
action  to  recover  such  benefits.'^ 

The  laws  of  a  mutual  benefit  society  provided  that  where  a 
member  had  a  cause  of  complaint  against  the  society  for  bene- 
fits, he  should  appeal  to  the  different  courts  of  the  order  nam- 
ing them,  and  should  he  neglect  to  pursue  this  course,  and 
bring  a  suit  in  court,  he  should  be  expelled  from  the  society. 
A  member  presented  a  claim  against  the  society  to  the  proper 
tribunal  of  the  order,  appealed  to  each  of  the  courts  as  pro- 
vided in  the  laws,  and  in  each  of  these  courts  his  claim  was 
denied.  He  then  brought  suit  in  the  courts  of  the  state  of 
Maryland,  but  it  was  held,  following  Anacosta  Tribe  v.  Mur- 
bach  supra  that  the  courts  of  that  state  had  no  jurisdiction  of 
the  claim. ^ 

§  366.  Authorities  continued.  A  corporation  was 
organized  under  the  laws  of  Illinois  for  the  purpose  of  provi- 
ding for  its  members  in  case  of  permanent  disability,  and  for 
their  dependents  in  caseof  death,  by  assessments  to  be  levied  on 
surviving  members.  Its  constitution  provided;  "all  claims 
against  the  association  shall  be  referred  to  the  board  of  direc- 
tors, whose  decision  shall  be  final,"  and  "  assessments  shall  not 
be  made,  except  on  its  authority,"  A  claim  against  the  cor- 
poration for  $2500.00,  on  a  contract  of  insurance  issued  by 
it  upon  the  life  of  a  deceased  member,  was  made  before  the 
board  of  directors. 

The  board  of  directors,  at  a  regular  meeting,  after  an  inves- 
tigation of  the  facts  in  regard  to  the  claim,  by  a  unanimous 
vote,  refused  to  allow  the  claim  and  ordered  an  assessment  for 
its  payment,  assigning  as  a  reason   that  the    deceased  was  at 

'  6  Cin.  Law  Bull.,  2:^7;  see  also  ^  Anacosta  Tribe  v.  Murbach,  13 
Mohawk   Lodge    v.    Wentworth,  4    Md.  91. 

Cin.  Law  Bulh  513.  ^  Osceola  Tribe  v.  Schmidt,  Adm'r 

57  Md.  98. 


Chap.  15,  §367.]        action  on  contract.  379 

least  sixty  days  delinquent  in  the  payment  of  his  assessments 
at  the  time  of  his  death.  Suit  was  afterward  brought  upon 
the  policy  in  the  U.  S.  Circuit  Court,  N.  D.  Illinois.  Blod- 
gett,  J.  held  that  the  power  of  these  directors,  in  regard  to  the 
allowance  of  this  claim,  and  the  ordering  of  an  assessment  to 
pay  it,  was  plenary  and  final,  and  that  after  the  decision  of 
the  board,  refusing  payment  of  the  claim,  no  suit  could  be 
maintained  upon  it.  In  this  opinion  the  learned  judge  cites 
no  authorities,  but  reasons  as  follows.  "  It  was  certainly 
competent  for  the  members  of  this  association  to  agree  among 
themselves  that  the  action  of  their  board  of  directors  in  refer- 
ence to  any  claim  presented  against  the  society  should  be  final, 
and  there  can  be  no  doubt,  from  the  language  of  the  clause  of 
the  constitution  just  quoted,  that  they  have  so  agreed.  The 
duty  of  the  board  of  directors  is  two  fold;  first,  to  approve  the 
claim,  and,  second,  to  order  an  assessment  to  pay  it,  and  no 
member  is  under  any  obligations,  expressed,  or  implied,  to 
pay  an  assessment  for  the  liquidation  of  a  claim  against  the 
association  unless  the  claim  has  been  approved  by  the  board  of 
directors,  and  the  assessment  ordered  by  the  board.  "Waiving, 
therefore,  all  questions  as  to  whether  the  board  of  directors 
would  be  under  any  more  obligations  to  approve  this  claim 
after  a  judgment  had  deen  rendered  in  favor  of  this  plaintiff 
than  before,  it  is  sufhcient  to  say  that  it  seems  clear  to  me  that 
the  sole  power  of  determining  whether  the  association  should 
or  should  not  pay  a  claim,  and  an  assessment  be  ordered  to 
pay  it,  is  vested  in  this  board  of  directors,  and  no  court  can 
review  or  re-examine  their  decision  in  that  regard.  The  con- 
stitution says  the  action  of  the  board  shall  be  final,  and  the 
courts  must  so  treat  it." 

^  367.  Authorities  holdinj?  that  society  may 
not  make  decision  of  its  tribunal  final.  The  o])in- 
ion  in  the  case  of  Bauer  v.  Sampson  Lodge,  etc.,  102  Ind.  262, 
is  worthy  of  examination  in  considering  the  power  of  a  society 
to  establish  tribunals  for  determining  claims  against  it,  and,  in 
order  that  it  may  be  the  more  readily  consulted,  it  is  given  here 
almost  at  length.  But,  before  quoting  from  the  case,  it  should  be 
said  that  this  case  and  Suju-eme  Council,  etc.,  v.  Garrigus,  1<>4 
Ind.  133,  are  sometimes  cited  as  sustaining  the  broad  pro])()sition 
that  a  society  which  issues  contracts  of  insurance,  or  agrees  to 
pay  benefits,  cannot,  by  provisions  in  such  contracts  and  agree- 
ments, compel  a  member  or  beneficiary  to  resort  to  the  courts 
of  the  society  and  exhaust  his  remedies  therein,  before  bring- 


380  ACTION    ON    CONTRACT.  [ChAP.  15,  §307. 

intr  an  action  in  the  public  courts  on  such  contract.  While 
the  discussion  and  argument  of  the  questions  involved  took 
a  wide  range  in  these  cases,  the  points  decided  by  the  court  by 
no  means  sustain  such  a  proposition. 

In  Bauer  v,  Sampson  Lodge,  supra^  it  is  said:  "The  rea- 
sonable rule  is,  that  such  an  organization  may  provide  meth- 
ods for  redressing  grievances  and  deciding  controversies,  and 
may  compel  members  to  resort  to  the  prescribed  method  of 
procedure  before  invoking  the  powers  of  courts,  but  that  it 
may  not  entirely  prohibit  members  from  suing  to  recover  ben- 
ehts  accruing  to  them  under  the  by-laws  of  the  organization. 
Men  voluntarily  enter  such  organizations,  and  in  becoming 
members  subscribe  to  their  laws,  and  if  these  laws  make  pro- 
vision for  trying  controversies,  the  member  aggrieved  must 
pursue  the  course  prescribed,  before  resorting  to  the  courts  to 
enforce  his  claims.  There  is  no  valid  reason  why  he  should 
not  be  compelled  to  do  what  he  has  agreed,  and  the  harmony 
and  efficiency  of  such  organizations  require  that  all  measures 
provided  and  required  by  their  by-laws  should  be  exhausted 
before  appealing  to  the  courts  to  settle  the  controversy.  On 
the  other  hand,  it  would  be  unjust  to  permit  such  organ- 
izations to  take  from  their  members  all  right  of  action  for 
money  due  them.  Claims  for  money  due  by  virtue  of  an 
agreement,  are  unlike  mere  matters  of  discipline,  questions  of 
doctrine,  or  of  policy,  and  are  not  governed  by  the  same  rules. 
A  corporation  which  promises  to  pay  a  certain  sum  as  benefits 
during  a  member's  illness,  in  consideration  of  his  payment  of 
dues,  is  not  a  purely  benevolent  organization;  it  may  be,  and 
doubtless  is,  benevolent  and  charitable  in  a  great  degree,  but 
it  is  not  a  benevolent  organization  in  the  sense  of  dispensing 
benefits  without  consideration.  The  consideration  the  order 
receives  is  the  dues  paid  by  the  member,  and  in  return  it 
promises  him  benefits.  In  speaking  of  an  order  of  a  character 
similar  to  the  Knights  of  Pythias,  the  Supreme  Court  of  Mas- 
sachusetts said:  '  The  corporation  is  not  a  mere  charitable 
society,  but  is  rather  in  the  nature  of  an  association  for  the 
mutual  insurance  of  its  members  against  sickness  or  accident. 
If  it  refuses  to  perform  its  contract  contained  in  the  by-laws, 
the  member  who  is  injured,  may  have  recourse  to  the  proper 
courts  to  enforce  the  contract.' '  Our  own  decisions  have  recog- 
nized a  like  doctrine  as  applicable  to  the  life-insurance  features 
of  such  organizations." 

'  Dolan  V.  Court  of  Good  Samar-  98  Ind.  149;  Supreme  Lodge,  etc,  y. 
itan,  etc.,  128  Mass.  437.  Schmidt,  98  Ind.  374. 

■■*  Elkhart  Mut.,  etc.,  v.  Houghton, 


Chap.  15,  P67.]        action  on  contract.  381 

It  is  not  within  the  power  of  individuals  or  corporations  to 
create  judicial  tribunals  for  the  linal  and  conclusive  settle- 
ment of  controversies.  *  *  It  is  to  be  noted  that  agree- 
ments to  submit  a  matter  to  arbitration,  are  valid  when  made 
after  the  specific  controversy  has  actually  arisen,  and  not  when 
made  in  advance,  certainly  not  when  the  agreement  provides 
that  one  of  the  interested  parties  shall  be  the  sole  arbitrator. 
The  weight  of  authority  is  very  decidedly  against  the  power 
of  parties  to  bind  themselves  in  advance  that  a  controversy 
that  may  possibly  arise  shall  be  conclusively  settled  by  an  in- 
dividual or  corporation,  and  to  that  doctrine  this  court  is  com- 
mitted.' 

As  all  persons  having  a  money  demand  against  an  individ- 
ual or  a  corporation  have  a  right  to  resort  to  the  courts  in  the 
first  instance,  when  payment  is  withheld,  to  coerce  payment, 
that  right  must  exist  unless  it  clearly  appears  that  it  has  been 
abridged  or  surrendered.  In  the  case  before  us  the  answer 
concedes  the  right  to  the  benefits  claimed,  but  afKrms  that 
an  action  cannot  be  maintained  because  the  claimant  has  not 
taken  the  steps  which  must  precede  the  assertion  of  the  claim 
in  a  court  of  justice.  In  order  that  this  general  right,  a  right 
possessed  by  all  citizens,  should  be  curtailed,  it  must  clearly 
appear  that  he  to  whom  the  money  is  due,  has  agreed  that  it 
may  be  abridged.  One  who  asserts  a  claim  to  money  due 
upon  a  contract,  occupies  an  essentialh'  different  position  from 
one  who  presents  a  question  of  discipline,  of  policy,  or  of  doc- 
trine of  the  order  or  fraternity  to  which  he  belongs.  All  the 
decisions,  from  first  to  last,  recognize  a  broad  distinction 
between  the  two  classes  of  cases,  and  the  one  before  us  belongs 
to  the  class  where  property  rights  are  involved,  and  is  a  mem- 
ber of  a  class  cognizable  by  the  courts.  The  policy  of  the  law, 
as  declared  in  our  constitution  and  by  our  decisions,  is  to  freely 
open  the  courts  to  those  who  seek  money  due  them  upon  con- 
tract, and  the  party  who  asserts  that  the  right  to  invoke  the 
aid  of  the  courts  has  been  curtailed,  must  show  a  clear  agree- 
ment abridging  the  right.  These  ]>rinciples  necessarily  lead 
to  the  conclusion  that  a  corporation  which  has  agreed  to  pay 
pecuniary  benefits  to  one  of  its  members  cannot  successfully 
resist  an  appeal  to  the  courts  without  showing  an  express  or 
implied  agreement  that  before  making  such    an    appeal    the 

'  Kistlor  V.   Indianapolis,  etc.,  R.    menia  Ins.  Co.,  79  Pa.  St.  478;  Wood 
R.  Co.,  88  Ind.  460;  Insiiranco  Co.  v.     v.  Ilumphrev,  114  Mass.  185. 
Morse,  20  Wall.  445;    Mentz   v.   Ar- 


382  ACTION   ON   CONTRACT.  [Chap.  15,  §367. 

members  shall  pursue  a  course  of  procedure  prescribed  bj  the 
laws  of  the  organization. 

In  the  case  in  judgment  there  is  a  clear  right  to  the  benefits 
claimed,  for  so  the  by-laws  provide,  and  where  there  is  a  right 
there  is  a  remedy.  It  there  ie  a  remedy  it  is  the  usual  one 
unless  by  a  legal  contract  the  parties  have  otherwise  agreed. 
Here  the  usual  remedy,  open  and  free  to  all  citizens  having  a 
just  demand,  is  an  ordinary  action  at  law,  and  the  question 
narrows  to  this,  has  the  claimant  abridged  his  remedy  by  con- 
tract? We  find  nothing  in  the  by-laws  which  can  be  deemed 
a  partial  or  a  total  surrender  of  his  right  to  enforce  his  con- 
tract in  the  usual  method.  It  is  true  that  there  is  a  general 
right  of  appeal  provided  for,  but  there  is  no  stipulation  that 
the  claimant  of  benefits  shall  appeal;  and,  if  we  are  correct  in 
our  reasoning,  there  is  no  abridgment  of  his  right  to  pursue 
the  usual  remedies.  In  order  to  abridge  this  right  there  must 
be  a  stipulation  to  that  effect.  Men  do  not  lose  their  legal 
right  to  enforce  their  contracts  unless  they  have  yielded 
it  up  by  agreement.  The  provision  that  an  aggrieved  party 
may  appeal  is  permissive,  it  does  not  wrest  from  him  the  right 
conferred  upon  him  by  law.  If  a  man  has  a  legal  right,  and 
the  corporation  of  which  he  becomes  a  member  adds  another, 
that  of  appeal  to  its  superior  governing  bodies,  the  added  right 
is  merely  cummulative,  it  is  not  exclusive;  positive  words  only 
can  take  away  an  existing  right.  Conferring  a  right  to  pur- 
sue a  given  course  does  not  destroy  an  existing  right;  in  order 
to  destroy  such  a  right  proper  limiting  words  must  be 
employed.  Here  there  are  no  limiting  words,  there  is  nothing 
that  limits  the  general  right  to  sue  in  the  courts,  and  a  right 
such  as  this  cannot  be  taken  away  without  a  clear  agreement 
surrendering  it.  If  it  had  been  the  intention  to  require  mem- 
bers to  surrender  their  right  to  sue  at  once  upon  the  breach  of 
the  contract,  and  to  compel  them  to  first  appeal  to  the -grand 
bodies  of  the  order,  it  would  have  been  easy  to  so  declare,  but 
there  is  no  such  declaration,  and,  therefore,  no  agreement  tak- 
ino-  away  the  right  to  sue  for  the  enforcement  of  the  contract, 
which  tiie  claimant  possessed  by  virtue  of  the  law  of  the  land. 

The  right  to  sue  is  one  given,  as  we  have  seen,  by  law,  and 
no  custom  can  be  good  which  is  contrary  to  law.  A  custom 
that  a  party  having  a  claim  for  money  due  upon  contract  may 
not  pursue  the  usual  remedies  provided  by  law,  is  not  valid.'" 

'Manson  V.  Grand  Lodge,  etc.,  30     Humphrej',  65  Ind.  549;   Spears    v. 
Minn.  509;   Thompson   v.   Ins.   Co.,     Ward,  48  Ind.  541. 
104U.  S.  252;  Franklin  Ins   Co.    v. 


Chap.  15,  §369.]        action  on  contract.  383 

§  368.  Authorities  continued.  In  Poultney  v. 
Bachman,  10  Abb.  New  Cases  252,  it  was  held  that  a  society 
could  not,  by  an  attempt  through  its  constitution  and  by-laws 
to  confer  upon  its  own  tribunals  the  exchisive  power  to  decide 
upon  claims  against  it,  deprive  the  courts  of  jurisdiction  to 
entertain  actions  against  it. 

In  treating  of  the  power  of  individuals  or  societies  to  create 
judicial  tribunals,  the  Court  of  Appeals  of  New  York  says: 

''  The  effect  of  some  of  these  provisions  of  these  constitutions 
is  to  create  a  tribunal  having  power  to  adjudicate  upon  the 
rights  of  property  of  all  the  members  of  the  subordinate 
lodges,  and  to  transfer  that  property  to  others  ;  the  members 
of  this  tribunal  being  liable  to  constant  fluctuations,  and  not 
subject  in  any  case  to  the  selection  or  control  of  the  parties 
upon  whose  rights  they  sit  in  judgment.  To  create  a  judicial 
tribunal  is  one  of  the  functions  of  the  sovereign  power;  and 
although  parties  may  always  make  such  tribunals  for  them- 
selves, in  any  specific  case,  by  a  submission  to  arbitration,  yet 
the  power  is  guarded  by  the  most  cautious  rules.  A  contract 
that  the  parties  will  submit,  confers  no  power  upon  the  arbi- 
trator, and  even  where  there  is  an  actual  submission,  it  may 
be  revoked  at  any  time.  The  law  allows  the  party  up  to  the  last 
moment  to  ascertain  whether  there  is  not  some  covert  bias  or 
prejudice  on  the  part  of  the  arbitrator  chosen.  It  would  hardly 
accord  with  this  scrupulous  care  to  secure  fairness,  in  such 
cases,  that  parties  should  be  legally  bound  by  the  sort  of  engage- 
ment that  exists  here,  by  which  the  most  extensive  judicial 
powers  are  conferred  upon  bodies  of  men  whose  individual 
members  are  subject  to  continual  fluctuation.'" 

In  Scott  V.  Avery,  5  House  of  Lords  Cas.  811,  the  Lord 
Chancellor  says:  "  There  is  no  doubt  of  the  general  principle 
that  parties  cannot  by  contract  oust  the  ordinary  courts  of 
their  jurisdiction.     That  has  been  decided  in  many  cases." 

§  369.  Authorities  continued.  In  Stephenson  v. 
Ins.  Co.,  54  Me.  70,  the  court  says: 

"  While  parties  may  imj)ose  as  condition  precedent  to  appli- 
cations to  tlie  courts  that  they  shall  flrst  have  settled  the  amount 
to  be  recovered  by  an  agreed  mode,  they  cannot  entirely  close 
the  access  to  the  courts  of  law.  The  law,  and  not  the  contract, 
prescribes  the  remedy,  and  parties  have  no  more  rit^ht  to  enter 
into  stipulations  against  a  resort  to  the  courts  for  tlieir  remedy 

'  Austin     V.     Hearing,    16   N.   Y. 
112-123. 


384:  ACTION   ON    CONTRACT.  [ClIAP.  15,  §390. 

in  a  given  case  than  they  have  to  provide  a  remedy  prohibited 
by  law.  Such  stipulations  are  repugnant  to  the  rest  of  the 
contract  and  assume  to  divest  courts  of  their  established  juris- 
diction. As  conditions  precedent  to  an  appeal  to  the  courts^ 
they  are  void." 

in  Home  Ins,  Co.  of  N.  Y.  v.  Morse,  20  Wall,  445,  approved 
in  Barron  v  Burnside,  121  U.  S.  186,  the  Supreme  Court  of 
the  United  States  says:  "  Every  citizen  is  entitled  to  resort 
to  all  the  courts  of  the  country,  and  to  invoke  the  pro- 
tection which  all  the  laws  or  all  those  courts  may  afford 
him.  A  man  may  not  barter  away  his  life,  or  his  freedom, 
or  his  substantial  rights.  In  a  criminal  case,  he  cannot, 
as  was  held  in  Cancemi  v.  People  18  N.  Y.  128,  be  tried 
in  any  other  manner  than  by  a  jury  of  twelve  men,  although 
he  consent  in  open  court  to  be  tried  by  a  jury  of  eleven 
men.  In  a  civil  case  he  may  submit  his  particular  suit  by 
his  own  consent  to  an  arbitration,  or  to  the  decision  of  a  sin- 
gle judge.  So  he  may  omit  to  exercise  his  right  to  remove 
his  suit  to  a  federal  tribunal,  as  often  as  he  thinks  fit,  in  each 
recurring  case.  In  these  aspects  any  citizen  may,  no  doubt, 
waive  the  rights  to  which  he  may  be  entitled.  He  cannot,, 
however,  bind  himself  in  advance  by  an  agreement,  which  may 
be  specifically  enforced,  thus  to  forfeit  his  rights  at  all  times 
and  on  all  occasions,  whenever  the  case  may  be  presented."  ' 

§  370.    Liiinitation  as  to  time  when  action  may 

be  brought.  A  mutual  benefit  society  may,  by  proper  pro- 
visions of  its  charter,  by-laws  or  certificates,  stipulate  that  any 
claim  for  benefits  shall  be  made  within  a  given  period  of  time, 
or  that  no  action  against  the  society  for  the  recovery  of  any 
claim  upon  the  contract  shall  be  maintained,  unless  com- 
menced within  a  certain  period  after  the  cause  of  action  shall 
accrue.  As  the  statutes  of  limitations  only  provide  that  no 
suit  'shall  be  brought  on  a  claim  after  a  certain  number  of 
years,  there  is  nothing  in  these  acts  abridging  the  right  of 
parties  to  contract  for  a  shorter  limitation  of  time.  Such 
limitations  are  strictly  construed  and  must  be  reasonable.'' 

Where  the  certificate  of  a  mutual  benefit  society  provides 
that  all  suits  to  recover  benefits  under  it,  shall  be  begun  within 
six  months  after  the  death  of  the  member  insured,  and  within 
that  time  an  injunction,  enjoining  the  beneficiary  from  receiv- 

'  Nute  V.  Hamilton  Mutual  etc.  '  May  on  Insurance  at  section  47& 
6  Gray  (Mass.)  174;  Hall  v.  Peo-  etseq.\  Bliss  on  Life  Insurance  at 
pie's  Mut.  etc.,  6  Gray  (Mass.)  185.        section  355  et  seq. 


Chap.  15,  §371.]        action  on  contract.  385 

ing  payment,  prevents  liini  from  beginning  suit  until  after  the 
expiration  of  the  six  raontlis,  the  six  months'  limitation  no 
longer  exists  after  the  removal  of  the  injunction,  and  suit  may 
be  brought  at  any  time  within  the  statute  of  limitations.' 
This  contract  period  does  not  open  and  expand,  like  the 
period  of  limitations  imposed  by  statute,  so  as  to  receive 
within  it  a  period  of  legal  disability,  and  then  close  together 
at  each  end  of  that  period,  as  though  the  period  of  legal  dis- 
ability had  never  occurred:  the  contract  period  relates  to  the 
six  months  next  after  the  loss,  and  the  court  has  no  right,  as 
in  the  case  of  a  statute,  to  construe  it  into  a  number  of  days 
equal  to  six  months,  made  up  of  the  days  in  a  period  of  time 
prescribed  by  the  statute  of  limitations,  in  which  the  plaintiff 
may  commence  his  suit.  In  such  a  case,  where  a  cause  inter- 
venes which  prevents  the  plaintiff'  from  suing  before  the  speci- 
tied  contract  period  expires,  the  contract  bar  cannot  be  after- 
ward revived,  but  is  absolutely  removed,  and  the  plaintiff  is 
then  only  bound  by  the  limitation  prescribed  by  statute." 

§371.  Limitation  as  to  time  continued.  Where 
the  contract  of  insurance  provides  that  no  action  on  the  con- 
tract may  he  maintained,  "  unless  commenced  within  six 
months  after  the  loss," — "  unless  commenced  within  one  year 
after  any  claim  shall  accrue,"  "•  unless  commenced  within  a 
term  of  twelve  months  next  after  the  loss  or  damage  shall 
occur," — etc.;  and  further  provides  that  a  loss  shall  not  l)e 
payable  until  a  certain  time  after  the  proofs  of  loss,  or  of  death, 
have  been  furnished,  the  period  of  limitation  does  not  begin 
to  run  until  the  certain  time  lixed  after  the  proofs  have  beeu 
furnished.^ 

If  the  delay  to  bring  suit  within  the  designated  period  is  a 
result  to  which  the  society  mainly  contributed  by  holding  out 
hopes  of  an  amica'ule  adjustment,  it  will  not  be  ])ermitted  to 
take  advantage  of  such  delay;  and  if,  aftei*  tiie  expiration  of 
such  ])eri()(l,  it  enters  into  any  negotiations  with  the  benefici- 
ary whereby  it  recognizes  the  continued  validity  of  the  certiti- 

'  Earnshaw  V.  Sun  Mutual  Aid  So-  Mutual  A.  &  L.  Ass'n  v.  Kayser,  14 

ciety,  Md.,  12  Atl.  Hop.  88-1.  W.  N.  C'as.  (Pa.)  8(3;  Spare  v.  Home 

^  Semme.s    v.    Insurance   Co.,   13  Mutual,  etc  ,  17  Fed.  Rep.  568;  Frie- 

AVall.  158.  zen  v.  Allemania   Ins.  Co.,  30   Fed., 

-  Hay  V.  Star   Ins.   Co..   77  N.  Y.  Hep.  352;  Vette  v.  Clinton   Ins.  Co., 

235;  Ellis  v.  Council  Bluffs  Ins.  Co.,  30  Fed.  Hep.  6(i8;  Harber  v.  Ins.  Co., 

64  Iowa  r)07;  Killiiis  v.  Putnam  Ins.  16  W.  Va.  658.      But  see  Jolinson  v. 

Co,  28   Wis.   472;    Chandler    v.    St.  Ins.  Co.,  !»2  111.  !)1,  and    Hetining  Co. 

Paul  F.  &  M.  Ins.  Co.,  21   Minn.  85;  v.  Ins.  Co.,  12  Ont.  App.  418. 
25 


386  ACTION  ON  coNTKACT.         [Chap.  15,  §372. 

cate,  it  will  be  held  to  have  waived  its  right  to  plead  the  limi- 
tation.' Repeated  promises,  from  time  to  time,  that  payment  or 
settlement  will  be  made,  and  declarations  that  there  is  no  need 
of  proceeding  by  law  to  enforce  payment,  are  a  sufficient  ex 
cuse  for  not  prosecuting  the  claim  against  a  society. ^  If  the 
beneficiary  is  induced  to  delay  his  action  on  a  certificate  by  the 
fraud  of  the  society,  or  by  its  holding  out  the  reasonable  hope 
of  payment,  the  limitation  will  be  disregarded.^  But  mere 
negotiations  for  a  settlement  are  not  sufficient  to  show  a  waiver 
of  the  limitation  of  time.^ 

§  372.  Limitation  as  to  place  where  action  may  be 
bronglit.  It  may  be  laid  down  as  a  general  rule  that  limi- 
tations as  to  the  place  where  actions  shall  be  brought  are 
invalid.  The  leading  case  upon  this  subject  is  Nute  v.  Ham- 
ilton Mutual  Insurance  Company,  6  Gray  174.  In  delivering 
the  opinion  in  this  case,  Shaw,  C.  J.  says:  "The  provision 
on  which  the  defense  depends  is  found  in  article  22nd  of  the 
by-laws.  After  providing  that  notice  of  loss  shall  be  given, 
and  that  thereupon  the  directors  shall  proceed  to  determine 
whether  any  loss  has  occurred  for  which  the  company  are 
liable,  and  if  so,  ascertain  the  amount,  it  provides  that  if  the 
assured  do  not  acquiesce  in  such  determination,  as  to  the  lia- 
bility or  extent  of  it,  and  both  parties  do  not  agree  to  refer, 
as  they  may,  '  the  assured  may,  within  four  months  after  such 
determination,  but  not  after  that  time,  bring  an  action  at  law 
against  the  company  for  the  loss  claimed,  which  action  shall 
be  brought  at  a  proper  court  in  the  county  of  Essex.'  Here  are 
no  negative  words,  and  strictly  speaking,  no  stipulation  that 
the  action  shall  not  be  brought  elsewhere,  unless  they  are 
implied  by  the  term  '  shall  be  brought '  in  Essex.  These  words 
were  not  necessary  to  give  the  assured  a  remedy,  because  with- 
out them  it  is  conceded  that  they  would  have  a  remedy  at 
common  law,  as  in  all  cases  of  breach  of  contract,  for  which 
no  stipulation  is  necessary.  *  *  *  *  The  court  is  of  the 
opinion  that  there  is  an  obvious  distinction  between  a  stipula- 
tion by  contract,  as  to  the  time  when  a  right  of  action  shall 
accrue  and  when    it  shall  cease,  on  the  one  hand,  and  as   to 

'  Martiu  v.  State  Ins.  Co..  44  N.  J.  ^  Derrick  v.   Lamar  Ins.  Co.,  74 

L.  485.  Ill  404 ;  Little    v.   Phoenix  Ins.  Co., 

5  Home  Ins.  Co.  v.   Myer,  93  111.  123  Mass.  880. 

371;  Andes  Ins  Co.  v.   Fish,  71  111.  ■•  Allemauia  lus.  Co.  v.  Little,  20 

<i20;    Bish   v.  Hawkeye  Ins.  Co.,  69  III.  App.  431 
Iowa  184;  St.  Paul  F.  &  M.  Ins.  Co. 
V.  McGregor,  63  Texas  399. 


■Chap.  15,  §372.]        action  on  contract.  387 

the  foruiii  before  which,  and  the  proceedings  by  which  an 
action  shall  be  commenced  and  prosecuted.  The  one  is  a  con- 
dition annexed  to  the  acquisition  and  continuance  of  a  legal 
right,  and  depends  on  contract  and  the  acts  of  the  parties;  the 
other  is  a  stipulation  concerning  the  remedy  which  is  created 
and  regulated  by  law.  Perhaps  it  would  not  be  easy  or  prac- 
ticable to  draw  a  line  of  distinction,  precise  and  accurate  enough 
to  govern  all  these  classes  of  cases,  because  the  cases  run  so 
nearly  into  each  other;  but  we  think  the  general  distinction  is 
obvious.  The  time  within  which  money  shall  be  paid,  land 
conveyed,  a  debt  released,  and  the  like,  are  all  matters  of  con- 
tract, and  depend  on  the  will  and  act  of  the  parties;  but,  in 
■case  of  breach,  the  tribunal  before  which  a  remedy  is  to  be 
sought,  the  means  and  processes  by  which  it  is  to  be  conducted, 
affect  the  remedy,  and  are  created  and  regulated  by  law.  The 
stipulation,  that  a  contracting  party  shall  not  be  liable  to  pay 
money,  or  perform  any  other  collateral  act,  before  a  certain 
time,  is  a  regulation  of  the  right  too  familiar  to  require  illus- 
tration; a  stipulation,  that  his  obligation  shall  cease  if  pay- 
ment or  other  performance  is  not  demanded  before  a  certain 
time,  seems  equally  a  matter  affecting  the  right.  A  stipula- 
tion, that  an  action  shall  not  be  brought  after  a  certain  day, 
or  the  happening  of  a  certain  event,  although,  in  words,  it 
may  seem  to  be  a  contract  respecting  the  remedy,  yet  it  is  so 
in  words  only;  in  legal  effect  it  is  a  stipuhxtion  that  a  right 
shall  cease  and  determine  if  not  pursued  in  a  particular  w^ay 
within  a  limited  time,  and  then  it  is  a  lit  subject  for  contract, 
affecting  the  right  created  by  it.  But  the  remedy  does  not 
depend  on  contract,  but  upon  law,  generally  the  lex  fori ^  re- 
gardless of  the  lex  loci  contractus,  \^;liich  regulates  the  con- 
struction and  legal  effect  of  the  contract.  Suppose  it  were 
stipulated  in  an  ordinary  contract,  that  in  case  of  breach  no 
iiction  shall  be  brought;  or  that  the  party  in  default  shall  be 
lial)le  in  equity  only  and  not  at  law,  or  the  reverse;  that  in 
any  suit  to  be  commenced  no  property  shall  be  attached  on 
mesne  process  or  seized  on  execution  for  the  satisfaction  of  a 
judgment,  or  that  the  party  shall  never  be  liable  to  arrest; 
that,  in  any  suit  to  be  brought  on  such  contract,  the  partv 
sued  will  confess  judgment,  or  will  waive  a  trial  by  jury,  oV 
consent  that  the  report  of  an  auditor  appointed  under  the 
statute,  shall  be  final,  and  judgment  be  rendered  upon  it,  or 
that  the  ])arties  may  be  witnesses,  or,  as  the  law  now  stands, 
that  the  plaintiff"  will  not  offer  himself  as  a  witness,  that,  when 


388  ACTION   ON    CONTRACT.  [ClIAP.  15,  ^373, 

sued  on  the  contract,  the  defendant  will  not  plead  the  statutes 
of  limitations,  or  a  discharge  in  insolvency;  and  man}'  others 
might  be  enumerated;  is  it  not  obvious,  that,  although  in  a 
certain  sense  these  are  rights  or  privileges  which  the  party,  in 
proper  time  and  place,  may  give  or  waive,  yet  a  com})liance 
with  them  cannot  be  annexed  to  the  contract,  cannot  be  taken 
notice  of  and  enforced  by  the  court  or  tribunal  before  which 
the  remedy  is  sought,  and  cannot  therefore  be  relied  on  by 
way  of  defense  to  the  suit  brought  on  the  breach  of  such  con- 
tract? *  *  '"  *  The  rules  to  determine  in  what  courts 
and  counties  actions  may  be  brought,  are  fixed  upon  consider- 
ation of  general  concurrence  and  expediency  by  general  law; 
to  allow  them  to  be  changed  by  the  agreement  of  parties 
would  disturb  the  symmetry  of  the  law,  and  interfere  with 
such  convenience.  Such  contracts  might  be  induced  by  con- 
siderations tending  to  bring  the  administration  of  justice  into 
disrepute;  such  as  the  greater  or  less  intelligence  and  impar- 
tiality of  judges,  the  greater  or  less  integrity  and  capacity  of 
juries,  the  influence,  more  or  less,  arising  from  the  personal, 
social  or  political  standing  of  parties  in  one  or  another  county. 
It  might  happen  that  a  mutual  insurance  company,  in  which 
every  holder  of  a  policy  is  a  member  and,  of  course,  interested, 
would  embrace  so  large  a  part  of  the  men  of  property  and 
business  in  the  county,  that  it  would  be  difficult  to  find  an 
impartial  and  intelligent  jury.  *  *  *  *  There  being  no 
authority  upon  which  to  determine  the  case,  it  must  be  decided 
upon  principle.  The  question  is  not  without  difficulty,  but, 
upon  the  best  consideration  the  court  have  been  able  to  give 
it,  they  are  of  opinion  that  it  is  not  a  good  defense  to  this 
action,  that  it  was  brought  in  the  County  of  Suffolk,  and  not 
in  the  County  of  Essex." 

§  373.     Liiiuitatiou  as  to   place  continued.      In 

Hall  V.  People's  Mut.,  etc.,  6  Gray  185,  the  court  says:  "It 
is  a  well-settled  maxim  that  parties  cannot,  by  their  consent, 
give  jurisdiction  to  courts  where  the  law  has  not  given  it;  and 
it  seems  to  follow  from  the  same  course  of  reasoning,  that 
parties  cannot  take  away  jurisdiction  where  the  law  has  given 
it."i  But  under  some  circumstances  and  conditions  limita- 
tions upon  the  place  of  bringing  actions  have  been  held  valid." 

'  See  Bartlett  v.  Union  Mut.,  etc.,  '  Bovnton  v.    Middlesex  Mutual 

46  Me.  500;   Reichard  v.  Manhattan  Fire  Ins.   Co.,  4   Met.   (Mass.)   212; 

Ins.    Co.,  31    Mo.    518;    Amesbury  Arnet   v.    Milwaukee   Mutual,  etc.,- 

et. al.  V.  Ins.  Co.,  6  Gray  (Mass)  596.  22  Wis. 516. 


Ohap.  15,  §374.]        ACTION  on  contract.  389 


Action  on  the  Contract  of  the  Society. 
Part  II. 


Sec   376  [  Pleading  and  evidence. 

Sec  877.    Admissibility  of  declarations  of  a  member. 

SEc:p:[p'-«°f««f^«^th. 

Sfp   S83  [  -^"^^^^^^  ^^  by-laws  for  benefits. 

Sec.  374.  Pleading-  and  evidence.  In  a  suit  on  a 
policy  of  life  insurance,  procured  by  the  insured  for  the  bene- 
iit  of  another,  it  is  not  necessary  that  the  declaration  should 
aver  that  the  beneficiary  had  any  interest  in  the  life  of  the 
insured,  but  a  different  rule  prevails  where  one  procures  an 
insurance  on  the  life  of  another.  In  such  a  case,  the  plaintiff 
must  aver  in  his  declaration  the  facts  showing  that  he  had  an 
insurable  interest  in  the  life  insured.'  The  same  rule  prevails 
in  suits  on  contracts  of  insurance  in  n;iutual  beneht  societies. 
A  stranger,  who  obtains  a  membership  for  anotlier  in  any  such 
society,  where  the  membership  secures  to  him  an  insurance 
upon  the  life  of  the  member,  must  aver  and  prove  the  facts 
showing  an  insurable  interest  in  the  life  of  the  member.'^ 

In  suits  upon  a  policy  payable  to  a  stranger,  it  is  proper  to 
leave  it  to  a  jury  to  say  whether  under  all  the  circumstances 
of  the  case,  the  contract  was  entered  into  by  the  parties  in 
good  faith,  or  as  a  means  of  procuring  a  wager  upon  life.' 
Tlie  mere  payment  of  premiums  by  the  beneficiary  is  not  con- 
clusive evidence  that  the  policy  was  taken  out  by  him.* 

Although  charter,  by-laws,  constitution,  rules,  regulations 
and  application  are  a  part  of  the  certificate  of  membership  and 
contract  of  insurance,  it  is  not  necessary  to  file  a  co]>y  of  any 
of  tliese  with  the  complaint  or  declaration.     The  burden  is  on 

•Guardian  Mut.  etc.,  v.  Hogan,  80  S.  561 ;  Swick  v.  Home  Life,  2    Dill 

111.  a.");  Franklin  Life  etc.  v.  "Sefton  160;  Laniidon  v.  Union  Mut.  etc,  14 

Adm'r.  53  Ind.  380.  Fed.  Kcp.  272. 

•J Elkhart  Mutual,  etc,  v.   Hough-  ••Tuston  v.  FLirdev,    14  Beav.  232  ; 

ton,  98  Ind.  149.  Armstrong  v.  Mut.  Life  etc,  13  Rep. 

s  Conn.  Mut.  etc.  v.  Schaefer,  94  U.  71. 
S.  457;  Aetna  Life  v.  France,   94   U. 


390  ACTION  ON  CONTRACT.         [Chap.  15,  §374, 

the  defendant  to  aver  and  prove  the  falsity  of  any  statement 
in  the  application,  or  that  the  contract  was  issned  contrary  to 
the  by-laws  or  rnles  of  the  society,  and  this  is  true  althon(i;h 
the  by-laws,  rules  and  application  may  be  set  out  in  full  in 
the  complaint  or  declaration,  and  whether  the  answers  in  the 
application  are  representations  or  warranties. 

There  are  cases  in  conflict  with  this  rule,  but  it  is  undoubt- 
edly supported  by  the  later  and  better  authorities  as  well  as 
by  the  better  reason.'  In  Piedmont  Ins.  Co.  v.  Ewing,  suyra^ 
it  is  said:  "The  number  of  questions  now  asked  of  the 
assured  in  every  application  for  a  policy,  and  the  variety  of 
subjects  and  length  of  time  which  they  cover  are  such  that  it 
may  be  safely  said  no  sane  man  would  ever  take  a  policy,  if 
proof,  to  the  satisfaction  of  a  jury,  of  the  truth  of  every 
answer  were  made  known  to  him  to  be  an  indisputable  prere- 
quisite to  payment  of  the  sum  secured:  that  proof  to  be  made 
only  after  he  was  dead  and  could  render  no  assistance  in  fur- 
nishing it.  On  the  other  hand,  it  is  no  hardship  that,  if  the  in- 
surer knows  or  believes  any  of  the  statements  to  be  false,  he  shall 
furnish  the  evidence  on  which  that  knowledge  or  belief  rests. 
He  can  thus  single  out  the  answer  whose  truth  he  proposes  to 
contest,  and,  if  he  has  any  reasonable  ground  to  make  such  an 
issue,  he  can  show  the  facts  on  which  it  is  founded." 

In  a  suit  upon  a  contract  of  insurance,  where  the  issue  is  as 
to  the  truth  of  the  answers  of  the  insured  in  his  application, 
the  possible  action  which  the  company  might  have  taken,  if 
the  insured  had  answered  otherwise  than  he  did,  is  inadmis- 
sible."-* 

Where  an  attempt  is  made  to  aver  notice  and  proof  of  death, 
as  required  by  a  certiiicate  in  a  mutual  beneiit  society,  it  may 
be  aided  by  an  averment  that  the  society  is  in  default  for  not 
paying  the  benefit  according  to  the  terms  of  the  certificate.* 

Where  a  policy  of  insurance  provides  for  the  payment  of 
different  sums  to  different  persons,  it  is  improper  for  benefi- 
ciaries to  join  in  one  action  to  recover  the  several  sums  due, 
but,  if  they  do,  the  court  may  order  each  beneficiary  to  file  his 
separate  petition,  and  defendant  to  answer  each,  without  fur- 
ther service  of  process.'* 

'  Piedmont  Ins.  Co.  v.  Ewins;,   93  ^  National  Benefit  Ass'n.  v.   Grau- 

U.  S.  377;  Continental   Life  etxi    v.  man,  107  Ind.  288;  7   N.    E.    Rep. 

Rogers,  119  111.  474;  10  N.   E.  Rep.  233. 

342.  ■»  Keary  v.  Mut.   Reserve   etc.,   30 

'  N.  W.  Benevolent  etc.,  v.   Hall,  Fed.  Rep.  359. 
118  111.  169;  8  N.E.  Rep.  764. 


Chap.  15,  §375.]        action  on  contract.  391 

§  375.  Pleading:  and  evidence  continned.  Where 
a  member  has  attempted  to  change  the  designation  of  his  ben- 
eficiary, and  the  original  ])eneticiary  brings  suit  on  the  cer- 
tificate, he  must  aver  and  prove  that  the  change  attempted  to 
be  made,  was  invalid.'  Where  a  benefit  certificate  is  made 
payable  to  a  certain  person  in  its  inception,  the  burden  of  proof 
is  upon  parties  claiming  an  assignment  of  such  certificate  to 
them,  to  show  a  jwhna  facie  valid  transfer  of  the  benefit 
accruing  from  said  certificate  to  themselves,  in  pursuance  of 
the  constitution  and  by-laws  of  the  order.'^ 

In  a  suit  on  the  by-laws  of  a  society  for  benefits,  plaintiff 
must  state  how  the  obligation  to  pay  money  arises,  what  the 
rules  and  regulations  are, and  that  he  has  complied  with  them. 
A  statement  of  demand,  claiming  a  balance  to  be  due  during 
plaintiff's  sickness,  at  the  rate  of  $3  per  week,  "the  sum  paid 
by  the  society  to  the  sick  of  the  society  "  does  not  contain  a 
legal  cause  of  action." 

In  an  action  on  a  contract  of  insurance  issued  by  a  mut- 
ual benefit  society,  proof  by  the  society  of  its  custom  and 
usage  in  the  management  of  its  affairs  and  the  payment  of  the 
assessments,  and  of  the  decisions  of  its  officers  respecting  the 
construction  of  the  contract,  are  inadmissible." 

A  contract  of  insurance  in  a  mutual  benefit  society  provided 
that  the  money  should  be  payable,  in  case  of  a  member's  death, 
to  his  wife,  her  executors,  etc.,  as  directed  by  said  member  in 
his  application,  "  or  to  such  other  person  or  persons  as  he 
might  subsequently  direct  by  will  or  otherwise."  In  an  action 
on  the  certificate  by  the  wife,  it  was  held  that  she  need  not 
allege  in  her  complaint  that  the  deceased  member  had  not 
directed  the  money  to  be  paid  to  any  other  ]^erson,  as  that 
was  a  matter  of  defense." 

In  actions  on  certificates  of  membershi])  issued  by  mutual 
benefit  societies,  designed  to  secure  the  payment  of  money  to 
those  dependent  upon  their  members,  after  the  death  of  such 
members,  courts  should  construe  the  rules  and  regulations  of 

'  ^lasonic  Mutual,  etc,  v.   Burk-  Fed.  Rep.  122;    Bauer  v.   Saiui>sou 

hart,  110    Ind    189;    11    N.  E.   Hep.  Lodije.  etc..  102   Itid.  2G2,    Tliomp- 

449.  son  V.  Ins.  Co.,  104  U.  S.  2.Vi ;  Frank- 

'  Henry   v.   Grand  Lodge,  15    111.  lin    Ins.  Co.    v.    Humphrey,  05    Ind. 

App.  151  549;    Davidson  v.   Supreme  Lodufe, 

s  Beneficial  Society  v.  White,  30  32  Mo.  Ai)p.  m,\. 

N.  J.  Law  313.           '  '  Laudenschlager  v.    N.   W.   En- 

*  Manson     v.    Grand    Lodire,    30  dow,   etc.,   Ass'n,   Minn.   30   N.  W. 

Minn.    509;    Ifi    N.    \V.    Rep.    395;  Rep.  447. 
Wiggin  V.   Knights  of  Pythias,  31 


392  ACTION  ON  CONTRACT.         [Chap.  15,  §376. 

such  societies  liberally  to  effect  the  benevolent  objects  of  their 
organization,  and  that  doctrine  of  construction  is  ap])licable 
generally  to  rulings  on  questions  of  evidence,  as  well  as  in 
othei-  respects.' 

§  376.     Pleadiiig"  and   evidence    continued.     In 

Georgia,  it  was  held,  that  under  the  statute  of  that  state  relat- 
ing to  competency  of  witnesses,  where  the  contract  in  issue  had 
beei\  made  between  an  incorporated  mutual  beneiit  society  and 
a  member,  and  the  latter  had  died,  the  officer  or  agent  enter- 
ing into  the  same  in  behalf  of  the  cor])oration  was  an  incom- 
petent witness;  but  that  the  other  members  of  the  society  were 
competent,"'' 

Where  the  plaintiff's  right  of  recovery  is  dependent  upon 
the  fact  that  the  deceased  member  was  in  good  standing  in  the 
society  at  the  time  of  his  death,  the  burden  of  proof  is  on  the 
plaintiff  to  show  such  good  standing  of  the  member.^ 

In  an  action  upon  a  certificate  of  membership,  reciting  that 
the  deceased  was  a  "  beneficiary  member  in  good  standing''  in 
the  society,  and  that  upon  his  death  a  sum  would  be  paid 
"  provided  he  be  in  good  standing  when  he  dies,"  the  certifi- 
cate is  proof  of  the  good  standing  of  the  party  named  at  the 
time  of  its  issue,  and  such  standing  will  be  presumed  to  have 
continued,  in  the  absence  of  contrary  evidence.  In  such  case, 
the  burden  is  on  the  society  to  show  that,  by  reason  of  his 
conduct,  or  his  failure  to  comply  with  the  regulations  or 
requirements  of  the  society,  the  deceased  had  lost  his  good 
standing," 

Proof  that  the  society  recognized  the  decedent  as  a  member 
up  to  a  short  time  before  his  death,  in  connection  with  the 
presumption  that  all  persons  follow  such  laws,  rules  and  regu- 
lations as  they  are  subject  to,  is  sufficient  evidence  of  the  good 
standing  of  decedent  to  maintain  the  action." 

When  the  by-laws  of  a  society  provide  that  the  quarterly 
dues  shall  be  payable  "  on  or  before  the  first  meeting  in  each 
quarter  "  in  order  to  show  that  the  member  is  not  in  good 
standing  by  reason  of  not  having  paid  his  dues  for  a  certain 
quarter,  it  must  be  shown  that  a  meeting  has  been  held  since 

'  SupremeLodsrev.  Schmidt  e/!aL,  ^  gjei^gr^    y    Chosen  Friends,  23 

98  Ind.  374;  Erdmann  v.  Order  Her-  Mo.  App.  268. 

man's   Sons,  44  Wis  376;    Supreme  ■•  Supreme  Lodge    v.  Johnson,  78 

Lod,s:e  V.  Abbott,  82  Ind.  1.  Ind.  111. 

*  (Georgia  Masonic  Mutual  v.  G-ib-  '  Lazenskv  v.  Supreme  Lodge   K. 

son,  52  Ga.  640.  of  H.  31  Fed.  Rep.  592. 


Chap.  15,  §377.]        action  on  contract.  393 

the  commencement  of  the  quarter.  Testimony  that  the  society 
holds  meetings  ev^ery  week  is  not  enough.' 

§  37*7.  Admissibility  of  declarations  of  mem- 
ber. The  question  of  the  admissibility  of  declarations  of  a 
member  of  a  society,  made  after  the  issuing  of  his  certificate, 
arose  in  the  case  of  Supreme  Lodge,  K.  of  H.  v.  Schmidt,  98 
Ind.  379.  The  court  says:  "Hanson  was  also  called  as  a 
witness,  and  counsel  for  the  defendant  offered  to  show  by  him 
that  between  the  21st  and  2.5th  days  of  August,  1879, 
he  accompanied  Schmidt,  the  decedent,  to  the  office  of 
the  supreme  nuister  of  exchequer,  at  the  time  he  went 
to  see  about  getting  reinstated,  and  that  he,  Schmidt, 
there  admitted  in  the  presence  of  Stumph  that  he 
had  receiv'ed  notice  of  assessment  No.  8,  in  contest,  that  he 
had  not  paid  that  assessment,  and  that  he  had  been  suspended 
for  its  non-payment.  If  this  action  had  been  upon  an  ordi- 
nary life  insurance  policy  the  decision  of  the  court  excluding 
what  was  proposed  to  be  proven  by  Hanson  would  have  been 
fully  sustained  by  the  authorities.  This  is  conceded  by  coun- 
sel for  the  appellant,  but  it  is  insisted  that  the  provision 
in  the  certificate  before  us,  authorizing  Schmidt  to  make 
a  different  disposition  of  the  proceeds  by  "  will  or  other- 
wise "  takes  it  out.  of  the  rule  applicable  to  ordinary  life 
insurance  policies,  recognized  as  above,  and  requires  us  to 
consider  Schmidt  as  having  been  the  real  owner  of  the 
certilicate  until  the  time  of  his  death;  that  Schmidt  being 
thus  the  real  owner  of  the  certilicate  at  the  time  hxed  in  the 
offered  evidence,  it  was  competent  to  prove  admissions  made  by 
him  affecting  its  validity  as  a  chose  in  action.  *  *  -^^  *  From  the 
time  of  the  issuance  of  the  certificate  until  Schmidt's  death,"  (the 
beneficiaries  named  in  the  certificate)  "  were,  in  legal  contem- 
plation, the  owners  of  it,  sul)ject  only  to  the  right  of  Schmidt 
to  ultimately  substitute  other  beneficiaries  by  will,  or  in  such 
other  manner  as  the  rules  and  regulations  of  the  order  might 
permit.  But  this  right  to  ultimately  substitute  other  benefi- 
ciaries did  not  emj>ower  Schmidt  to  destroy  the  value  of  the 
certificate  in  the  hands  of  the  aj^pellees  l)y  merely  hearsay  or 
irrelevant  admissions  concerning  matters  in  issue  between 
other  parties.  Schmidt  having  never  exercised  the  right  of 
substitution  reserved  to  him,  we  are  justified  is  assuming  that 
he  never  intended  to   exercise  it,  and  that    as    between    the 

'    Mills   V.    Rebstock,    29    Minn. 
380. 


394  ACTION    ON    CONTKACT.  [('lIAl'.  15,  §378. 

appellees  and  the  order,  the  former  have  been  the  absolute 
owners  of  the  certificate  ever  since  it  was  issued.  We  are, 
consequently,  unable  to  hold  that  the  alleged  admissions  of 
Schmidt  to  Hanson  in  the  presence  of  Stumph,  wei-e  any  more 
admissible  as  evidence  in  the  case  in  hearing  than  they  would 
have  been  in  an  action  upon  a  life  insurance  policy  issued  in 
the  usual  form.  In  actions  upon  life  policies,  or  certificates  of 
membership  issued  by  mutual  societies  designed  to  secure  the 
payment  of  moneys  to  those  dependent  upon  its  members 
after  the  death  of  such  members,  courts  should  construe  the 
rules  and  regulations  of  such  societies  liberally  to  effect  the 
benevolent  objects  of  their  organization,  and  that  doctrine  of 
construction  is  applicable  generally  to  rulings  on  questions  of 
evidence,  as  well  as  in  other  i-espects.' 

In  an  action  by  a  beneficiary  upon  a  certificate  issued  to  a 
member  of  a  mutual  benefit  society,  an  application  for  rein- 
statement, made  by  the  member,  is  not  competent  evidence  to 
prove  the  fact  of  his  suspension.  Is  or  is  a  statement  made  by 
the  member,  that  he  was  suspended  for  the  non-payment  of  an 
assessment,  competent  evidence  to  prove  that  fact.^ 

§  378.  Proofs  of  death.  The  furnishing  of  proof  of 
death  of  the  member  is  usually  made  a  condition  precedent  to 
the  liability  of  the  society  upon  its  certificate. 

Where  a  by  law  of  a  mutual  benefit  society  provides  that, 
upon  receipt  of  notice  of  death  of  a  meml)er,  the  secretary  shall 
immediately  forward  to  the  beneficiary  the  proper  blanks,  and 
full  instructions  how  to  make  proofs  of  death,  and  the  society, 
upon  notice  of  the  death  of  a  member,  with  a  request  to  send 
the  blanks  and  instructions  as  to  the  required  proof,  refuses  to 
send  the  same  on  the  ground  that  the  decedent  had  failed  to 
pay  his  assessments,  and  had  ceased  to  be  a  member  before  his 
death,  this  refusal  to  send  the  blanks  and  instructions  is  a 
waiver  of  the  preliminary  proof  of  death. ^ 

'Declarations  of  assured  admissi-  etc.,  v.  Wiler,   100  Ind.   92;    Valley 

ble,  Kelsey  v.  US.  Ins.  Co.  85  Conn.  Mut.  Life  Ins.  Co.  v.  Burke  12  Ins. 

225 ;  Aveson  v.  Lord  Kinnard,  6  East  L  J.  337. 

188  ;Declarations  of  assured  inadmis-        ^Larenskv  v.  Supreme   Lod<re   K. 

sible,  Swift  v.  Mass.  Mut   etc.,  63 N.  of  H.  31  Fed.  Rep.  592;   Dodse    v. 

Y.  186 ;  Eddington  v.  Mut.  Life  etc.,  Freedmans'  Co.,    93  U-    S.    379 ;    1 

67  N.  Y.  185 :  Dilleber  v.  Home  Life  Greenl.  Ev.  at  section  171. 
etc,  69  N    Y.   256;    Fraternal   Mut        ^  Co^gna^t  ]\i^tual   etc.    v.    Spies 

etc.,  V.  Applegate,  7   Ohio    St,  292;  et  al.  114  111.463;  Kansas  Protective 

Hurd  V.  Masonic  Mut.  etc.,  6  Ins.  L.  Union    v.    Whitt,  37  Kan.;    14  Pac. 

J.  792;  Mobile  Life  etc.,  v.  Morris,  3  Rep.  27;  Grattan    v.    Ins.  Co.  80  N. 

Lea  101 ;  Washington   Life  etc.,    v.  Y.  281. 
Haney,  10  Kans.  525 ;  Penn.  Mutual 


Chap.  15,  §380.]        action  on  contract.  395 

Where  proofs  of  death  of  the  assured  have  been  made,  and 
the  society  retains  them  without  suggesting  any  defect  in  the 
proof,  and  finally  wholly  refuses  to  pay  the  claim,  it  thereby 
waives  any  defect  in  the  formal  proof  of  death,  and  acknowl- 
edges that  the  requisite  proofs  were  received  by  it.  J3ut  such 
proof  must  be  to  such  a  degree  formal  as  to  show  that  it  is 
intended  to  be  the  preliminary  proof  of  death. 

"Where  preliminary  proof  of  death  of  a  member  has  not  been 
furnished  to  a  benefit  society  as  required  by  the  contract,  a 
refusal  to  pay  on  other  grounds  is  a  waiver  of  this  require- 
ment.' 

§  379.  Proof  of  death  continued.  Where  a  policy 
provided  for  due  notice  and  proof  of  the  death  of  the  insured, 
and  of  the  just  claim  of  the  claimant,  and  the  society  had  paid 
the  amount  of  the  policy  to  a  party  not  entitled  by  law  to  its 
benefits,  he  having  presented  proofs  of  the  death  of  the  insured 
to  the  society,  and  afterwards  the  rightful  beneficiary 
made  proof  by  affidavit  of  the  death  of  the  insured,  and 
his  own  just  claim,  a  general  objection  by  the  society  to 
the  sufficiency  of  the  proofs  is  not  good.  The  court  says: 
"  As  the  proofs  of  the  death  of  the  insured  already  in  posses- 
sion of  the  defendant  had  been  accepted  by  them  as  satisfac- 
tory, there  is  no  merit  in  the  contention  of  the  defendant,  that 
the  plaintiffs  have  failed  to  comply  with  the  terms  of  the  policy 
in  this  respect.  If  the  defendant  has  not  already  waived  any 
proof  of  death  by  claiming  that  they  had  paid  the  loss  to  the 
person  entitled,  they  did  waive  further  proof  than  the  affidavit 
by  failing  to  specify  any  grounds  of  objection  to  it  in  form  or 
substance."^  Preliminary  proof  of  death  may  be  waived  by  a 
mutual  benefit  society.^ 

Where,  by  the  terms  of  the  contract,  the  society  is  not  bound 
to  levy  an  assessment  to  meet  a  death  loss,  until  sixty  days 
after  due  proof  of  the  death  has  been  made,  a  declaration  or 
complaint  which  fails  to  state  that  such  proof  has  been  niade, 
is  defective.^ 

§  380.      Actions  on  by-laws  for   benefits.     In  an 

action  against  a  mutual  benefit  society  for  the  recovery  of  sick 

'  Lazeiiskv  v.  Supreme  Lodge  etc.  '  Covenant  Mutual  etc.     v.    Spies 

31  Fed.  Kep.  592.  et  nl.  114  111.  463. 

'  Tiinayenis   v.  Union  Mutual  etc.  ^Taylor    v.     Relief    Union,  Mo.; 

21    Fed.'  Hep.   223;    Wuesthoff    v.  6  S.  W.  Rep.  71. 
Gerinania   etc.   Co.,  107   N.   Y.  580, 
overruling  52  Superior  Ct.  208. 


396  ACTION    ON    CONTRACT.  [ChAP.  15,  §381. 

benefits,  the  burden  of  proof  is  on  the  plaintiff  to  establish  a 
by-law,  rule  or  custom  rendering  the  society  liable  for  such 
sick  benefits.'  An  action  may  be  maintained  by  a  member  of 
of  a  mutual  l)enefit  society  upon.a  by-law  of  the  society  agreeing 
to  pay  benefits  to  members  in  case  of  sickness.  In  such  an 
action,  the  by-law  is  the  basis  and  foundation  of  the  suit,and  it  is 
not  a  sufficient  averment  that "  it  is  a  rule  of  the  association  that 
every  member  in  good  standing  when  sick  shall  be  entitled  " 
etc.  A  mere  rule  is  a  thing  that  can  be  abrogated  at  the  ])leasure 
of  the  association,  and  has  not  the  binding  force  of  a  contract 
between  the  corporation  and  its  members. 2 

Where  it  is  provided  in  the  by-laws,  as  a  prerequisite  to 
recovery  of  benefits,  that  the  member  applying  shall  furnish  a 
physician's  certificate  to  the  "  sick  committee,"  it  must  be 
furnished,  before  an  action  will  lie  to  recover  such  benefits. 
The  mere  exhibition  of  such  certificate  to  a  member  of  such 
committee  is  not  sufficient.' 

§  381.  Action  on  by-laws  continued.  If  an  in- 
corporated benevolent  society,  the  by-laws  of  which  provide 
for  the  payment  of  a  weekly  allowance  to  a  sick  member,  upon 
the  performance  of  a  certain  condition  by  him,  refuses  to  fulfil 
its  contract,  the  member  injured  thereby  may  at  once  main- 
tain an  action  at  law  against  it,  where  the  by-laws  of  the  so- 
ciety" make  no  provision  for  a  tribunal  to  decide  questions  aris- 
ing between  the  society  and  its  members." 

The  by-laws  of  a  society  provided  that  a  sick  member  on 
sending  to  the  society  "'every  week  during  his  sickness"  a  cer- 
tificate signed  by  a  qualified  surgeon  stating  his  illness,  "  shall 
be  entitled  to  a  weekly  allowance  of  five  dollars."  A  member 
of  the  society  was  taken  ill  in  another  state,  and  sent  to  the 
society  a  certificate  stating  his  illness,  and  signed  bv  a  person 
who  was  in  fact  a  surgeon  in  attendance  upon  him,  but  who 
did  not  describe  himself  in  the  certificate  as  such.  Accom- 
panying the  certificate  was  a  letter  from  the  member  in  which 
he  spoke  of  it  as  the  doctor's  certificate.  No  other  certificate 
was  furnished  until  after  his  return  to  Massachusetts  about 
three  months  later,  when  he  furnished  a  certificate  that  he  had 
been  ill  since  the  date  named  in  his  first  certificate. 

'  Mullally  V.  Irish  Am.  Ben.  Soc.  nessey,  76  Tnd.  191;  Beneficial  Soci- 

6  Pac.  Rep.  78,  decided  by  Supreme  ety  v."  "White,  30  N.  J.  Law  313. 

Court  of  California,  but  not  report-  ^  Harrington  v.  Benevolent  Soci- 

ed  in  California  Reports.  ety,  70  Ga.  340. 

-  Irish  Catholic  etc.   v.    O'Shaug-  ••  See   §356. 


Chap.  16,  §382.]        action  on  contract.  397 

In  a  suit  upon  the  by-law  providing  for  sick  benefits,  it  was 
held  that  the  tirst  certificate  was  a  substantial  compliance  with 
the  by-laws,  and  entitled  the  member  to  receive  an  allowance 
for  one  week,  and  that  he  was  not  entitled  to  any  further  allow- 
ance, i 

§  382.  Action  on  by-laws  contiiiiied.  The  by- 
laws of  an  incorporated  mutual  benefit  society  provided  that  a 
member  who  became  incapable  of  working,  in  consequence  of 
sickness  or  accident,  should  receive  from  the  society  a  certain 
sum  per  week;  that  he  could  not  receive  such  benefit  without 
making  application  in  writing  to  the  society,  nor  before  two 
members  appointed  by  the  president  had  visited  him  and 
made  a  report  to  the  society.  A  member  of  the  society 
became  ill,  and  was  unable  to  work.  He  gave  notice  in  writ- 
ing of  his  illness  to  the  society,  and  a  special  committee- 
visited  him  and  reported  his  condition  to  the  society.  On  a 
day  named,  he  was  entitled  to  receive  from  the  society  a  cer- 
tain sum  for  two  weeks'  illness,  which  was  afterward  ten- 
dered to  him.  On  that  day,  he  resumed  work  at  his  regular 
employment,  and  worked  for  two  consecutive  days,  receiving 
his  wages  therefor,  but  during  the  two  days  he  was  not  physic- 
ally in  a  fit  condition  to  work,  and  could  only  perform  light 
work,  and  not  even  that  without  unreasonable,  excessive  and 
harmful  exertion.  During  the  time  he  was  so  employed,  a 
committee  of  the  society  visited  his  house,  and  afterwards 
reported  that  he. had  returned  to  work,  and  the  committee  was 
discharged  from  further  duty.  At  the  expiration  of  the 
two  days,  he  suffered  a  relapse,  and  was  unable  to  work  for 
a  period  sufficient  to  make  four  weeks  from  the  date  of  his 
first  illness  by  including  said  two  days  in  the  computation. 
No  notice  of  his  illness  was  given  to  the  society  after  the  day 
when  he  so  resumed  work,  and  the  society  took  no  action 
thereon.  He  then  brought  an  action  for  sick  benefits. 
The  court  says:  "  The  fact  of  having  done  some  work  is  not 
the  final  test.  The  by-law  must  have  a  reasonable  construc- 
tion. A  man  recovering  from  an  illness  of  about  three  weeks 
duration  may  justly  be  deemed  to  be  'incapable  of  working  '" 
although  by  unreasonable,  excessive  and  harmful  effort  and 
exertion,  he  succeeds  in  doing  light  work  for  two  consecutive 
days,  and  then,  by  reason  thereof,  suffers  a  relapse.  That  the 
recurrence  of  the  j^laintiff's  illness  was  a  relapse  caused  by 

'  Dohin  V.  Court  Good   Samaritan, 
128  Mass.  437. 


398  ACTION  ON  CONTRACT.         [Chap.  15,  §383. 

excessive  and  harmful  exertion,  might  fairly  be  inferred.  The 
fact  that  he  received  wages  for  those  two  days  is  immaterial. 
But  one  report  from  the  committee  for  a  continuous  illness  is 
contemplated  in  the  by-laws.  Such  report  having  been  made, 
the  plaintiff  was  not  affected  by  what  they  did  afterwards,  or 
by  their  discharge.'" 

§  383.  Action  on  by-laws  continued.  The  con- 
stitution of  a  mutual  benefit  society  provided  that  a  member 
"permanently  disabled  from  following  his  or  her  usual  or 
other  occupation  "  was  entitled  to  a  benefit,  and  in  another 
section  defined  such  disability  as  one  which  should  "  perman- 
ently prevent  the  member  from  following  any  occupation 
whereby  he  or  she  can  obtain  a  livelihood."  In  construing 
these  provisions,  it  was  held  that  the  words  "or  other  occupa- 
tion "  in  the  first  mentioned  section,  could  not  be  held  to  mean 
"  or  other  of  the  same  kind,"  and  the  definition  in  the  latter 
section  was  conclusive  against  one,  who,  disabled  in  his  own 
trade,  had  been  working  at  another  totally  dissimilar  business, 
against  one  who,  disabled  from  following  the  occupation  of  a 
barber,  is  able  to  run  a  restaurant,  or  clerk  in  a  store." 

>  Genest  v.  L'Union  St.  Joseph,  34  Fed.  Rep.  721 ;  See  Sec.  173  p. 
141  Mass.  417.  208.     See  sec.  3,  p.  4. 

'  Albert  v.  Order  of  Chosen  Friends 


Chap.  15,  p84.J        action  on  contract.  399 


Action   on   the   Contract   of  the    Society. 
Part  III. 


Sec.  384.  Plans  and  schemes  of  mutual  benefit  insurance. 

Sec.  385.  Actions  on  certificates  under  the  first  i)lan. 

Sec  386.  Actions  on  certificates  under  the  second  plan. 

Sec.  387.  Actions  on  certificates  under  the  third  plan. 

Sec.  388.  Mandamus  as  a  remedy. 

lEc.So.i^^^^^^y^'^^^i^^t^'- 

Sec.  391.     Contract  to  resort  to  equity  for  relief. 
Sec.  392.     Actions  at  law. 

S  r   Vit  f  Pleading,  breach  of  promise  to  pay,  etc. 

Sec  396.     Averment  of  demand  for  assessment. 

Sec.  397.     Plea  setting  up  that  no  fund  has  been  raised  by  assessment. 

Skc  398.    Effect  of  collection  of  assessment  by  society. 

Sec.  399.  )  Evidence  of  amount  that  might  have  been    realized    by   an 

Sec.  400.  )  assessment. 

Sec  401.    Burden  of  proof. 

Sec  402.     Measure  of  damages. 

c^^'  ai^a'  (•  Nominal  damages  in  an  action  at  law. 
Sec.  404.  )  " 

Sec.  405.    Substantial  damages  in  an  action  at  law. 
Sfc   407   [  Reiiiedy  in  equity  discussed. 


Sec  408.  Ordinary  legal  remedy  for  breach  of  contract 
a  ■  .J.  ,'  Burden  of  proof  and  measure  of  damages  disi 
Sec.  412.     Measure  of  damages  in  certain  cases. 


§  384.      Plans  and  schemes  of  insurance.     Each 

mutual  benefit  society  has  its  own  form  of  contract  of  insur- 
ance, differing  in  detail  from  the  others.  They  seem,  how- 
ever, to  be  formed  upon  three  general  plans. 

First.  Where  the  society  agrees,  upon  certain  conditions, 
to  pay  a  certain  sum  of  money  on  the  death  of  a  member. 

Second.  Where  the  society  agrees  to  pay,  upon  certain 
conditions,  as  tnany  dollars  as  there  are  members  of  the  society 
in  good  standing  at  the  time  of  the  death  of  a  member. 

Third.  Where  the  society  agrees,  upon  certain  conditions, 
on  the  death  of  a  member,  to  levy  an   assessment  upon   its 


400  ACTION    ON    CONTRACT.  [ChAP.  15,  §388. 

members,  of  a  certain  sum  of  money,  and  to  pay  the  proceeds 
of  such  assessment  to  the  beneficiary  of  the  member. 

^  385.     Actions  on  certificates  under  first  plan. 

Actions  upon  certificates  issued  under  the  first  plan,  where  the 
agreement  is  to  pay  a  fixed  sum  of  money  to  the  beneficiary  of 
a  member  dying  in  good  standing,  are  governed  by  the  same 
principles  which  obtain  in  suits  upon  ordinary  insurance 
policies. 

§  386.      Actions  on   certificates   under  second 

plan.  Concerning  actions  upon  certificates  issued  under  the 
second  plan,  where  the  society  agrees  to  pay  to  the  beneficiary 
of  a  member  dying  in  good  standing  as  many  dollars  as  there 
are  members  of  the  society  at  the  time  of  his  death,  little  ne6d 
here  be  said.  There  is  nothing  in  such  a  contract  suggestive 
of  the  idea  that  defendant's  liability  is  dependent  upon  col- 
lections received  from  an  assessment,  and  a  complaint  or  dec- 
laration upon  it  states  a  cause  of  action,  although  it  neither 
alleges  the  actual  receipt  of  money  upon  an  assessment  to 
meet  the  loss,  nor  a  neglect  to  make  such  assessment.' 

Parol  evidence  is  admissible  to  show  the  number  of  mem- 
bers of  the  society  at  the  death  of  the  deceased  member,  in 
order  to  ascertain  the  sum  recoverable  under  the  contract.'^ 

§  387.    Actions  on  certificates  vmder  tliird  plan. 

Where  the  society  agrees,  upon  the  death  of  a  member  in  good 
standing,  to  levy  an  assessment  of  a  certain  sum  of  money  on 
each  member  of  the  society,  and  to  pay  the  proceeds  thereof 
to  the  beneficiary  of  the  member,  many  questions  may  arise. 
In  the  first  place,  let  us  inquire  whether  mandamus  is  the 
proper  remedy  for  a  breach  of  the  contract. 

§  388.  Mandamus  as  a  remedy.  In  the  lower 
courts,  the  point  is  often  made  that  the  proper  proceeding  upon 
such  a  certificate  of  membership  is  neither  by  suit  at  law  nor 
bill  in  equity,  but  is  by  inandainus  to  compel  the  officers  of 
the  society  to  make  an  assessment.  But  this  point  has  seldom 
been  pressed  in  courts  of  last  resort,  for  an  investigation 
readily  shows  that  it  is  not  well  taken.  It  is  elementary  that 
a  court  has  no  jurisdiction  by  mandamus  to  compel  the  per- 
formance of  executory  contracts,  and  especially  is  this  the 
case,  where,  in  the  performance  of  such  contracts,  discretion 

'  Neskern  v.  N.  W.  Endow.  &  ^  Benefit  Society  v.  Flietsam,  97 
Legacy  Ass'n,  30  Minn.  406.  Ill  474. 


Chap.  15,  ^388.]        actioj^  on  contract.  401 

and  judgment  must  be  exercised.^  It  is  also  laid  down  as  the 
rule,  both  in  this  country  and  in  England,  that,  where  a  party 
has  another  specific  legal  remedy,  he  may  not  resort  to  a  pro- 
ceeding by  mandate.  It  has  been  held,  upon  this  ground, 
that  the  beneficiary  may  not  resort  to  such  a  proceeding.  ^ 

In  Burhmd  v.  N.  W.  Mut.  Ben.  Association  -17  Mich.  427, 
in  discussing  the  propriety  of  m/indamus  as  a  remedy  in  a 
case  of  contract  between  parties,  and  a  breach  thereof,  the  court 
says  :  "  Such  a  writ  does  not  purport  to  adjudge  or  decide 
any  right.  It  is  rather  in  the  nature  of  an  award  of  execution 
than  of  judgment.  It  is  the  mode  of  compelling  the  perform- 
ance of  acknowledged  duty  or  enforcing  an  existing  right  rather 
than  deciding  what  that  right  or  duty  is.  The  award  is  no 
finality.  It  concludes  nothing.  If  the  writ  is  denied,  the 
relator  cannot  have  error,  and  if  granted,  the  award  could  not 
be  pleaded  in  law.  If  the  writ  were  issued  in  this  case,  it 
could  not  direct  the  payment  of  any  specific  amount,  as  that 
is  dependent  upon  the  number  of  certificates  in  force  at  a  given 
time,  which  must  first  be  ascertained,  so  that  a  question  might 
arise  whether  it  would  not  be  necessary  to  issue  several  in  order 
to  give  the  party  adequate  relief.  But  why  should  this  be 
done  while  the  defendant  company  denies  all  and  any  liability 
because  of  fraud  or  false  representations?  Here  is  a  question 
that  should  first  be  settled,  and  manifestly  an  ordinary  trial 
in  a  court  of  huv  is  the  proper  way  of  so  doing.  The  argu- 
ment that  the  company  has  no  funds  to  pay  a  judgment,  if  one 
is  recovered,  can  be  no  reason  for  issuing  the  writ.  If  it  were, 
this  court  might  be  under  the  necessity  of  issuing  it  in  the  case 
of  insolvent  debtors  generally.  Indeed,  it  may  be  said  that  a 
private  corporation  cannot  by  the  peculiar  form  of  contract  it 
enters  into  with  individuals,  nor  because  of  its  insolvency,  or 
both,  avoid  an  action  at  law  upon  a  bi-each  of  its  agreement, 
or  confer  oi'iginal  jurisdiction  upon  this  court  for  the  collec- 
tion of  money  demands." 

In  Bates  v.  Detroit  Mutual  Benefit  Association,  47  Mich. 
646,  application  was  made  for  a  inandamiis  to  compel  an 
assessment.  The  application  was  denied,  as  the  court  was  of 
the  opinion  that  niandamuf^  was  not  the  proper  remedy. 

'  People  C.C   rel.  v.    YiwVcmcw  et  nl.  Turniiike  Co.,  IG  Ohio  St.  ;108;  State 

%  111.503:    County   of   St    Clair  v.  v    Uailroad   Co.,  4:5  N.  J.   Law   505; 

The  People,  85  111.  396;    High  Ext.  State   v.    Bridsre    Co.,  20   Kan.   404; 

Rem.  at  section  321.  State   v.   Trustees  of  Salem  Ciiurch, 

*  E.xcelsior   Mutual   Aid,  etc..   v.  Ind.;  16  N.  E.  Hep  808. 
Riddle,   91    Ind.   84;    see    State  v. 
20 


402  ACTION  ON  CONTRACT.        [Chap,  15,  §389. 

In  a  suit  upon  a  fire  insurance  policy  issued  by  a  mutual 
insurance  company,  which,  in  substance,  provided  that  the  loss 
as  adjusted  should  be  paid  by  assessments  upon  its  members, 
it  was  held,  that,  as  the  society  had  adjusted  plaintiff's  loss, 
and  had  neglected  to  make  the  necessary  assessmeiit  witliin 
the  time  stipulated  in  the  contract,  plaintiff  was  entitled,  under 
sections  3375  and  3381  of  the  Code  of  Iowa,  to  an  order  of 
mandamus  to  compel  the  levy  of  such  assessment." 

§  389.  Remedy  in  equity.  It  has  been  held  that 
courts  of  equity  have  jurisdiction  to  enforce  speciiic  perform- 
ance of  those  contracts  of  insurance  which  provide,  in  sub- 
stance, that,  upon  the  death  of  a  member  who  has  complied 
with  all  the  requirements  of  the  contract  upon  his  part  to  be 
performed,  the  society  will  levy  an  assessment  upon  its  mem- 
bers, collect  and  pay  over  to  the  l^eneliciar}^  the  proceeds 
thereof.  The  grounds  of  such  equitable  jurisdiction  are  not 
discussed  at  length  in  any  of  the  cases  holding  this,  doctrine, 
though  the  relation  of  trustees  and  cestuis  que  trustent  is,  in  a 
measure,  assumed,  and  the  inadequacy  of  the  legal  remedy 
seems  to  be  the  foundation  of  the  decisions. 

Ordinary  mutual  life  insurance  companies  are  not,  in  any 
sense,  trustees  in  their  relations  to  their  policy  holders. ^  It  has, 
however,  been  held  that  a  mutual  benefit  society  stands  as  a 
trustee  of  the  fund  which.it  collects  for  the  beneficiary  entitled 
thereto.^  Whether  relations  of  trust  exist  betw^een  the  society 
and  its  officers,  or  between  the  society  and  its  members  need 
not  here  be  inquired  into,  but  it  would  certainly  be  difficult  to 
define  any  general  fiduciary  relation  between  the  society  and  a 
beneficiary  of  one  of  its  contracts  of  insurance.  When  we 
consider  that  the  contract  is  unilaterial,  binding  upon  the 
society  in  case  the  member  desires  to  continue  the  contract,  but 
not  enforceable  against  a  member  refusing  or  neglecting  to 
pay;  that  so  many  courts  have  held  the  legal  remedy  to  be 
practicable  and  adequate;  that  assumed  fiduciary  i-elations 
between  the  parties  are  illusive,  intangible  and  incapable  of 
satisfactory  definition,  we  may  be  in  doubt  as  to  equitable 
jurisdiction  in  such  cases.  Nevertheless,  because  of  the 
peculiar  provisions  of  the  contract  of  insurance,  and  the  power 

'  Harl  V.   Mutual  Fire  Insurance  ^  Relief  Association  v.  McAulev, 

Co.  Iowa ;  36  N.  W.  Rep.  8S0.  2  Mackey,  D.  C.  70 ;  Covenant  Mutual 

-  Taylor  v.     Charter  Oak    etc.,  9  Benefit  Association     v.     Sears,   114 

Daly  489;   Bewley  v  Equitable  etc.  111.108;  lure   Protection  Life  Ins. 

Society,  61  How.  Pr.  344;   Cohen  v.  Co  ,  9  Bissell  188;  Wilber  v.  Torger- 

N.  Y.  Mutual  etc.,  50  N.  Y.  610.  sou,  24  111.  App.  119. 


Chap.  15,  §390.]        action  on  contract.  403 

of  a  court  of  equity  to  give  adequate  and  direct  relief  in  the 
enforcement  of  its  provisions,  and  because  of  the  uncertain 
and  narrow  relief  by  execution  on  a  judgment  at  law,  it  is  cer- 
tain that  such  contracts  possess  the  essential  elements  and 
incidents  which  give  to  courts  of  equity  the  jurisdiction  to 
compel  their  performance,  or,  to  put  it  in  another  form,  to 
issue  a  mandatory  injunction  to  compel  the  society  to  make 
an  assessment. 

§  390.  Remedy  in  equity  continued.  A  society 
issued  to  a  member  a  certificate  by  which  it  agreed,  upon  his 
death,  to  make  an  assessment  on  each  member  of  the  society, 
and  to  pay  the  proceeds  of  such  assessment,  not  exceeding  the 
sum  of  twenty -live  hundred  dollars,  to  the  beneficiary,  etc. 

After  the  death  of  the  member,  the  beneficiary  brought  an 
action  at  law  upon  the  certificate,  but  the  Supreme  Court  of 
Iowa,  Beck,  J.  dissenting,  held  that,  upon  the  refusal  of 
the  defendant  to  make  the  assessment  and  pay  over  the 
proceeds  of  such  assessment,  an  action  at  law  could  not  be 
maintained  for  the  recovery  of  such  sum  as  it  might  be  sup- 
posed would  have  been  realized  if  the  assessment  had  been 
made;  that  the  remedy  of  the  beneficiary  was  by  a  proceeding 
to  compel  the  society  to  make  the  assessment.' 

In  Newman,  Trustee  v.  Covenant  Mut.  Ben.  Ass'n.,  Iowa; 
33  N.  W.  Rep.  662,  decided  by  the  same  court  three  days 
after  the  case  of  Ranisbarger  v.  Union  Mat.  Aid  Ass'n.  supra, 
the  court  held  that  an  action  at  law  was  properly  brought  on 
such  a  contract,  but  that  in  such  an  action  nominal  danuiges 
only  could  be  recovered. 

A  bill  in  chancery  was  i)r()Ught  to  recover  the  benefit  fund 
agreed  to  be  paid  by  the  terms  of  a  certificate  of  membership 
in  a  society.  Objection  was  taken  to  the  jurisdiction  of  the  court, 
that  there  was  an  adequate  remedy  at  law.  The  Supreme  Court 
of  Illinois,  in  passing  upon  this  (piestion,  says:  "  Tiie  certifi- 
cate of  membership  does  not  contain  any  contract  to  pav  to 
the  beneficiaries  $.5,000.00,  or  any  sum,  absolutely,  l)ut  to  lew 
assessments,  ratably,  upon  all  members  holding  certificates  in 
force  at  the  death  of  decedent,  for  an  amount  not  less  than  the 
limit  of  the  certificate,  and  to  pay  over  the  sum  socollected  on 
such  assessments,  less  the  collection  costs.  As  thecorjioration 
is  not  organized  for  ])ecnniary  ju-ofit,  has  no  surplus,  and  relies 
entirely  upon  the  mortuary  assessments  made  upon  each  death 

'Ranisbarger  v.  Union  Mut.  Aid  Bailey  v.  ]\Iut  Ben.  Ass'n.  Iowa: 
Ass'n.,  Iowa;   33  N.   W.  Hep.   G26;    27  N.' W.  Hep.  770. 


404  ACTION    ON    CONTKACT.  [ChAP.   15,  §301. 

for  the  payment  of  benefits  to  the  beneficiaries  of  a  decedent, 
it  woukl  be  difficult  to  realize  anything  by  execution.  x\nd 
the  association  stands  as  a  trustee  of  a  fund  in  the  hands  of  its 
numerous  members,  but  belonging  to  the  beneficiaries,  which 
can  be  called  in,  by  assessment",  for  their  use.  It  would  seem,, 
then,  that  a  court  of  equity  might  properly  be  resorted  to  as 
being  capable  of  affording  a  more  adequate  remedy,  by  direc- 
ting a  specific  performance  of  the  contract  of  the  defendant  by 
the  levying  of  the  proper  assessments.'" 

Courts  of  equity  have  no  jurisdiction  in  suits  against  mutual 
benefit  societies /c^r  damages  for  refusing  to  make  the  assess- 
ment stipulated  for  in  its  certificate  of  membership.- 

§  391.  Contract  to  resort  to  equity.  While  par- 
ties may  not,  by  contract  in  advance,  waive  all  their  remedies 
for  a  breach  of  a  contract,  yet  they  may  waive  some  of  them, 
and  may  stipulate  in  advance  which  remedies  only  may  l)e 
pursued  in  case  of  its  breach.  The  only  limitation  upon  this 
abridgment  of  remedies  is  that  the  one  stipulated  to  be  pur- 
sued shall  be  capable  of  affording  substantial  relief.  Such  a 
waiver  or  stipulation  must  be  in  express  and  unequivocal 
terms.  A  society  issued  a  certificate  of  membership  in  which 
it  agreed  that,  if  the  member  died  in  good  standing,  it  would 
make  an  assessment  upon  the  surviving  members  and  pay 
over  the  proceeds  of  the  assessment,  not  exceeding  $5000.00, 
to  the  beneficiaries  of  the  insured.  The  certificate  contained, 
among  other  conditions,  the  following:  "The  only  action 
maintainable  upon  this  policy  shall  be  to  compel  the  associa- 
tion to  levy  the  assessments  herein  agreed  upon,  and  if  a  levy 
is  ordered  by  the  court,  the  association  shall  be  liable  under  this 
policy  only  for  the  sum  collected  under  an  assessment  so  made.'^ 
In  an  action  at  law  upon  the  policy.  Judge  McCrary  said: 
"  If  the  polic}^  provided  in  clear  terms  that  the  beneficiaries 
shall,  in  case  of  death,  receive  a  particular  sum  to  be  recovered 
by  assessment,  or  to  be  paid  by  the  company  after  making  an 
assessment,  if  the  company  had  refused  to  make  an  assess- 
ment, I  am  inclined  to  the  opinion  that  an  action  at  law  might 
be  maintained,  especially  if  there  was  no  provision  in  the 
policy  itself  forbidding  it.  But  since  the  policy  here  does  not 
fix  upon  the  company  an  absolute  liability  to  pay  any  particu- 
lar sum,  but  only  a  liability  to  pay  the  proceeds  of  a  particular 

'  Benefit  Association  V.  Sears,  114  Mutual  etc.,  Iowa,  33  N.  W.  Rep.. 
111.  108.  662. 

''Newman,  Trustee  v.    Covenant 


Chap.  15,  §392.]        action  on  contract.  405 

assessment,  to  be  levied  in  a  particular  way;  and  since  it 
further  provides  that  the  company  shall  only  be  liable  in  a 
proceeding  to  compel  it  to  make  the  assessment,  we  are  of  the 
opinion  that  an  action  at  law  cannot,  at  least  in  the  first  in- 
stance, be  maintained.  However  inequitable  such  a  contract 
may  be,  it  is  undoubtedly  within  the  power  of  the  parties  to 
enter  into  it,  and,  therefore,  we  think  that  the  only  remedy, 
according  to  the  practice  of  this  court,  and  under  the  terms  of 
the  policy,  is  by  a  proceeding  in  chancery  to  compel  a  specific 
performance."  ' 

§  393.  Action  at  law.  Though  a  beneficiary  may  resort 
to  equity,  and  seek  a  mandatory  injunction  to  compel  the 
society  to  make  an  assessment,  upon  its  neglect  or  refusal  to 
do  so,  tlie  decided  weight  of  authority  is  to  the  effect  that  he 
may,  if  he  prefer,  bring  an  action  at  law  for  damages  for 
breach  of  the  contract.  Nearly  all  of  the  adjudicated  questions 
on  the  subject  of  mutual  benefit  insurance  have  arisen  in  suits 
at  law.  It  is  true  that  in  few  of  these  suits  at  law  is  there  any 
discussion  of  the  question  as  the  proper  form  of  action,  or  the 
proper  forum  for  the  adjudication  of  the  rights  and  remedies 
of  the  parties.  The  fact  that  few  of  these  cases  discuss  these 
questions,  may,  at  first  impression,  seem  to  detract  from  their 
force  as  authorities  in  favor  of  the  proposition  that  an  action 
at  law  is  a  proper  and  adequate  remedy,  but  the  general 
accpiiescence  of  the  bench  and  bar  in  this  proposition  is  cer- 
tainly a  strong  argument  in  favor  of  its  soundness.* 

'  Eggleston  et  al,  v.  Centennial  v.  Miller,  23  111.  App.  341 ;  Man- 
Mutual  Life  Association,  etc.,  18  dego  v.  Cent.  Mut.  Life  Ass'n.,  64  la. 
Fed.  Rep.  14;  19  Fed.  Rep.  201.  134;  Mutual  Endow.  Association  v. 

-  Tlie  followiug  are  some  of  the  Essender,  59  Md.  463 :  Yoe  v.  Mas- 
cases  in  wliich  it  is  decided,  or  as-  onic  Mutual  etc.,  63  Md.  86;  Earn- 
sumed  tliat  an  action  at  law  for  shaw  v.  Sun  Mutual  Aid,  etc.,  Md. 
damages  is  a  proper  and  adequate  11  Cent.  Rep.  508;  Bates  v.  Mut. 
remedy  for  a  breach  of  the  agree-  Hen.  Ass'n.,  47  Mich  646;  17  N.  W. 
ment  to  levy  an  assessment  and  pay  Rep.  67;  Burland  v.  N.  W.  Mut. 
over  tlie  i>r()ceeds,  and  in  wliich  the  Ben.  Assn.,  47  Mich.  4'27 ;  Stewart  v. 
questions  arising  in  the  record  are  Lee  Mutual  etc.,  Ass'n.,  64  Miss, 
discussed  and  decided  upon  that  499;  1  Southern  Rep.  743;  Tivlor  v. 
theory.  Relief  Union,  Mo. :  6  S.  W.  Rep-  71 ; 

Curtis  V.  Mutual  Benefit   Life  Co.  Freeman  v.  National   Ben.   Soc.   42 

48    Conn.    98;    Miller    v.     Georgia  Hun    (N.    Y.)   252;    Balder  v.  N.  Y. 

Masonic  etc.,  57  Ga.   221;   Covenant  State  Mut.    Ben.    As.'^'n.    27    N.    Y. 

Mutual  Benefit  Association  v.    Ilotf-  Weekly  Dig.  91;  Fairchild  v.  North 

man,  110  111.  603;  Suppiger  v.  Cove-  Eastern  Mut.  Life  Ass'n.,  51  Vt.613; 

nant  Mutual  etc.,  20    111    App    505;  Hankinson  v.  Paige,  31    Fed.    Hep. 

Life  Association  v.    Hagler,   23    111.  top  page  189. 
App.  457;  Mutual  L.   c"v:  A.    Society 


406  ACTION    ON    CONTRACT.  [CilAP.  15,  §394:. 

§  393.    Pleading',  breach  of  promise  to  pay,  etc. 

Where  the  contract  of  the  society  is  to  pay  a  specific  sum  of 
money,  it  is  sufficient  to  aver,  in  a  complaint  or  declaration  on 
the  contract,  a  breach  of  the  promise  to  pay  that  sum.  IJut 
where  the  contract  provides  that  the  society  shall  pay  as 
many  dollars,  or  as  many  times  a  specific  sum,  as  there  are 
members  of  the  society  in  good  standing  at  the  time  of  the 
death  of  the  member,  it  is  evident  that,  in  addition  to  an 
averment  of  a  breach  of  the  contract  to  pay,  there  must  be 
an  allegation  of  the  number  of  such  members,  in  order  to 
give  the  data  from  which  the  amount  of  the  liability  may 
be  computed.  The  want  of  such  allegation  would,  doubt- 
less, be  cured  after  verdict.  It  is  also  evident  that,  where 
the  contract  provides  merely  that  the  society  shall  levy  an 
assessment  upon  its  members  and  pay  over  the  proceeds 
thereof  to  the  beneficiary,  it  is  not  sufficient  to  aver  a  breach 
of  the  promise  to  pay.  The  facts  must  be  alleged,  which 
raise  the  promise  to  pay,  and  it  is  necessary  to  aver,  in  a 
complaint  or  declaration  on  sncli  a  contract,  either  that  an 
assessment  has  been  levied  and  a  certain  amount  collected 
thereon,  which  the  society  refuses  to  pay,  or  that  the  society 
has  neglected  or  refused  to  levy  an  assessment  upon  its  mem- 
bers and  to  pay  to  the  plaintiff  the  amount  that  would  have 
been  realized  from  such  an  assessment.  The  want  of  such 
an  averment  is  a  fatal  defect  on  demurrer,  on  motion  in 
arrest  of  judgment,  or  when  the  question  is  raised  for  the 
first  time  in  the  court  to  which  an  appeal  has  been  taken, 
for  there  is  not  only  an  omission  to  state  any  facts  to  show 
the  ground  of  the  society's  liability,  but  there  is  also  a  want 
of  data  to  show  the  amount  of  such  liability,  or  from  which 
it  may  be  computed. 

§  394.     Breach   of  promise  to  pay  continued. 

Where,  however,  the  contract  provides  that  the  society  shall 
levy  an  assessment  upon  its  members  and  pay  to  the  bene- 
ficiary the  proceeds  thereof,  not  exceeding  a  certain  sum, 
there  is  a  division  of  authority  as  to  whether  it  is  necessary  to 
allege  either  a  neglect  to  levy  such  asssssment,  and  the  amount 
that  would  have  been  realized  had  it  been  levied,  or  that  an  assess- 
ment had  been  levied  and  the  payment  of  the  proceeds  refused. 
One  line  of  authorities  holds  that,  as  the  society  has  set 
the  limit  to  its  liability,  and  held  out  the  hope  that  so  large 
an  amount  may  be  realized  from  an  assessment,  the  benefici- 
ary may  declare  as  upon  an  express  promise  to  pay  the  speci- 


ClIAP.  15,  §395.]  ACTION    ON    CONTRACT.  4rOT 

tied  amount,  leaving  the  society  to  aver,  as  a  matter  of  de- 
fense, the  facts  which  show  the  amount  of  the  liability  to  be, 
in  fact,  less  than  that  limit.'  The  other  line  of  authorities 
holds  that  as  the  maximum  amount  is  not  absolutely  prom- 
ised,but  is  merely  mentioned  as  the  limit  of  liability,  the  rule 
of  pleading  is  not  changed  by  such  words  of  limitation. - 

It  has  also  been  held,  in  another  line  of  cases,  that  to  en- 
title plaintiff  to  recover  in  an  action  at  law  for  damages,  he 
must  allege  in  his  declaration  and  show  on  the  trial  that  the 
society  has  levied  an  assessment  upon  its  surviving  members  to 
pay  the  death  loss,  has  collected  the  amount  of  such  assess- 
ment, and  has  failed  to  pay  the  sum  so  collected;  that  it  must 
appear  both  in  the  declaration  and  in  evidence  that  the  society 
has  in  its  hands  the  money  collected  by  assessment,  which  it 
ought  to  pay  to  plaintiff  as  beneficiary  entitled  to  it;  that  if 
the  association  has  failed  to  make  the  required  assessment,  or, 
having  made  the  assessment,  has  neglected  to  collect  the 
same,  plaintiff's  remedy  is  in  some  other  form  of  action  or 
proceeding.^ 

§395.    Breach  of  promise  to  pay — Evidence.     A 

certiticate  of  membership  in  a  mutual  benelit  society,  provid- 
ing that  on  the  death  of  a  member  and  due  proof  thereof,  etc., 
an  assessment  shall  Ije  levied  upon  the  members  holding 
certificates,  and  that  the  amount  collected  from  such  assess- 
ment shall  be  paid  to  his  beneficiaries,  not  to  exceed  a  cer- 
tain sum,  is  not  admissible  in  evidence  under  a  declaration 
which  avers  a  promise  by  defendant  to  ])ay  a  specific  sum. 
Tfie  court  says:  "The  certificate  of  membership  read  in 
evidence  was  clearly  inadmissible  under  the  declaration,  which 
does  not  aver  that  any  assessment  was  made,  or  the  numl)er 
of  members  liable  to  assessment,  or  the  amount  that  could 
have  been  collected  by  such  assessment,  or  aver  any  facts 
showing  a  duty  by  defendants  to  make  such  assessment,  but 
avers  a  promise  by  defendants  to  pay  plaintiffs  a  specific  sum 
of  $4,000.     The  certificate  read  to  support  this  averment  is  a 

'Elkhart    Mut.  Aid  v.  IToimhton,  tnal    Aid,  etc.,  Md  ;    11  Cent.    Rep. 

103Itid.  2S(!;  Lueders' E.\'r  V.' Hart-  .WS;    Tavlor   v.    Relief  Union.  .Mo. : 

ford  Life,  etc.,  12  Fed   Rep.  4')5  ;    4  G  S   W.  \iep.  71  ;  Life  Association  v. 

McCrary    14!);     Kau.sas     Protective  H  itrler,  2:}  111.  Ajip.  457 
Union,  etc.,  v.    Whitt  87    Kan.;    14        ^  Smith    v.    Covenant   Mat.  Ben. 

Pac.    Rep.    275;      see   Suppii^er   v.  Ass'n,  24   Fed.  Rep.  ()85;    Newman 

Covenant    Mut.    Ben.   Ass'n,  20    111.  Trustee  v.  Covenant  Mut.  Ben.  Ass'n, 

Api).  595;  see  ?;  401.  Iowa;   38   N.  W.Rep.  602 ;   Tohin  v. 

'  Curtis    V.    Mutual    Benefit,  etc.,  AVesterii  Mut.  Aid  Soc,  Iowa;  33  N. 

48  Conn.  98;    Earnshaw  v.  Sun   Mu-  W.  Rep.    G63;    see  ^^390,  402. 


408  ACTION    ON    CONTRACT.  [ClIAl'.   15,  §397. 

conditional  promise  to  pay  tlie  amount  collected  of  members 
by  assessments,  less  cost  and  expense  of  collection.  There  is 
a  fatal  variance  between  the  averments  and  the  proof  offered 
to  sustain  them.'" 

§  396.     Averment   of  deinaud   for    assessment. 

It  is  not  necessary,  in  order  to  lay  the  foundation  of  a  recov- 
ery, that  the  plaintiff  shall  make,  or  aver  that  he  has  made,  a 
demand  upon  the  society  for  an  assessment  upon  its  members 
to  pay  the  death  loss.  The  duty  to  make  an  assessment  is  im- 
posed upon  the  society  by  contract,  and  if  the  society  fails  in 
this  duty,  the  beneficiary  has  the  right  to  his  proper  remedy 
for  such  failure.^ 

The  furnishing  of  satisfactory  proof  of  the  death  of  the 
member  to  the  society,  according  to  the  provisions  of  the  cer- 
tificate issued  to  him,  should  be  held  to  be  a  demand  for  pay- 
ment, and,  impliedly,  a  demand  upon  the  society  to  procure 
the  necessary  fund  by  an  assessment  if  need  be.'' 

§  397.  Plea  setting  up  that  no  fund  has  been 
raised  by  assessment.  In  an  action  of  assumpsit  on  a 
certificate  of  membership,  the  society  pleaded  that  it  wasprovi- 
ded  in  its  by-laws  that  the  money  to  be  paid  on  the  death  of 
any  member  should  be  produced  by  an  assessment  of  S2.00,to 
be  levied  upon  each  of  the  remaining  members  of  the  series 
of  membership  to  which  the  decedent  belonged,  and  that  no 
such  assessment  had  been  levied  or  ordered.  The  court  said: 
"  This  plea  is  bad,  as  it  is  the  duty  of  the  officers  of  the 
defendant  to  order  an  assessment  on  the  death  of  a  member, 
and  to  permit  the  defendant  to  set  up  the  failure  of  duty  of  its 
officers,  as  a  reason  for  defeating  the  plaintiff's  action,  would 
be  to  allow  it  to  take  advantage  of  its  own  wrong."^ 

By  a  certificate  of  insurance  is  sued  to  a  member  of  a  society, 
there  was  to  be  paid  to  the  beneficiary,  if  living  *  *  *  ^\  in 
ninety  days  after  due  proof  of  the  death  of  said  member,  a 
sum  equal  to  the  amount  received  from  a  death  assessment, 
but  not  to  exceed  three  thousand  dollars.  The  fourth  condi- 
tion thereof  provided  that  "  the  death  claim  under  this  con- 
tract shall  be  payable  in  ninety  days,  after  satisfactory  proof 

'  Life  Association  v.   Hagler,  23  ^Freeman     v.    National     Benefit 

111.  App.  457.  Society,  42  Hun  252. 

'  Smith  V.  Covenant  Mutual   Ben.  •*  Birtibaum  v    Passenger  Conduc- 

Ass'n,   24   Fed.   Rep.   685 ;     Kansas  tor's,  etc.,  15  Weekly  Notes  of  Cases 

Protective  Union   v.    Whitt,  37  Kan.  (Pa)  518;  See  Hankinson   v.   Paige, 

14  Pac.  Rep.  275.  31  Fed.  Rep.  184-183-189. 


Chap.  15,  §397.]        action  on  contract.  409 

of  the  death  of  the  said  member  shall  have  been  furnished," 
as  therein  provided.  In  a  suit  by  the  beneliciary,  after  the 
death  of  the  member,  the  society  objected  to  the  right  of  the 
plaintiff  to  maintain  the  action  to  recover  the  amount,  upon 
the  ground  that  the  promise  to  pay  was  contingent,  not  abso- 
lute, as  payment  was  to  be  made  out  of  a  s])ecial  fund,  the 
death  fund,  to  be  procured  from  an  assessment  of  the  mem- 
bers of  the  society,  and  that  the  beneficiary  was  restricted  to 
the  fund  thus  specitied;  and,  further,  that  there  was  no  proof 
of  the  existence  of  such  fund.  The  court  says:  ''  It  may  well 
be  that  the  beneficiary  would  be  thus  restricted,  in  case  of  due 
effort  by  the  society  to  assess  its  mem])ers  liable  to  assess- 
ment therefor.  An  omission  to  make  an  assessment  which,  if 
made,  would  produce  a  fund  equal  or  greater  than  the  claim, 
would  create  an  obligation  against  the  society,  the  same  as  if 
it  had  the  fund  on  hand  from  which  to  make  payment.  It 
could  not  lie  by,  and  omit  to  put  into  operation  the  means  pos- 
sessed by  it  to  obtain  the  fund,  and  omit  payment  l)ecause  of 
its  own  neglect  of  duty.  This  would  be  to  take  advantage  of 
its  own  wrong,  and  it  would  operate  as  a  fraud  on  the  benefi- 
ciary under  the  certificate,  since  the  obligation  to  raise  the 
fund  by  assessment,  when  shown  to  be  adequate  for  that  pur- 
pose, would  take  the  place  of  the  fund  in  determining  the 
(piestion  of  liability.  So,  too,  the  furnishing  of  satisfactory 
proof  of  the  death  of  the  member  of  the  society,  according  to 
the  provisions  of  the  certificate  issued  to  him,  should  be  held 
to  be  a  demand  for  payment,  and  impliedly  would  also  be  a  de- 
mand upon  the  company  to  procure  the  necessary  fund  by 
assessment  if  need  be.  It  should  be  further  observed  that  ac- 
cording to  the  fourth  condition  upon  which  the  certificate  was 
issued  and  accepted,  ])ayment  was  to  be  made  absolutely  in 
ninety  days  after  satisfactory  proof  of  the  deatli  of  the  mem- 
ber was  duly  furnished  to  the  society.  So,  too,  the  provision 
in  the  body  of  the  certificate,  that  payment  should  be  made  of 
a  sum  equal  to  the  amount  received  from  a  death  assessment, 
not  to  exceed  the  sum  specitied,  in  ninety  days  after  due  ])roof 
of  the  death  of  the  member  was  given,  im])lies  an  obligation 
upon  the  com])any  to  jiroceed  and  make  the  necessary  assess- 
ment to  raise  the  fund  within  the  time  during  which  it  was 
jtrovided  that  the  claim  should  remain  in  abeyance.  For  all 
these  reasons,  the  objection  to  recovery,  on  the  ground  that 
there  was  no  proof  of  the  existence  of  a  death  fund,  must  be 
held  of  no  avail.'" 

'Froeniim  v.  National  HeuolitSoc-  » 

ioty,  42  IIun(N.  Y.)  252. 


410  ACTION    ON    CONTRACT,  [Oil AT.   15,  §399, 

§  398.  Evidence,  effect  of  collection  of  assess- 
ment by  society.  In  an  action  on  a  certiiicate  of  member- 
ship,  it  appeared  in  evidence  that  the  society  had  levied  an 
assessment  upon  its  members  and  realized  the  benefit  fund 
with  which  to  pay  plaintiff's  claim.  The  society  offered  to 
show  the  invalidity  of  the  plaintiff 's  claim  by  proving  the  fals- 
ity of  certain  representations  made  by  the  member  upon  pro- 
curing the  certificate,  which  representations  were  made  a  part 
of  the  contract.  The  evidence  was  excluded,  under  the  objec- 
tion of  the  society,  upon  the  ground  that,  as  the  society  had 
acquired  the  money  sought  to  be  recovered,  by  virtue  of  assess- 
ments levied  upon  and  paid  by  its  members  for  the  purpose 
of  paying  the  claim,  it  thereby  became  the  agent  of  its  mem- 
bers for  the  purpose  of  paying  the  money  upon  the  claim,  and 
had  no  right  to  contest  its  validit}'  or  withhold  the  payment 
of  the  money.  But,  upon  appeal,  it  was  held  that  the  court 
erred  in  so  excluding  the  evidence;  that  it  was  the  right  and 
duty  of  the  society  to  protect  its  members  and  the  benefit  fund 
from  all  invalid  claims.' 

§  399.  Evidence  of  amonnt  that  niigrlit  liave 
been  realized  by  an  assessment.  In  Freeman  v. 
National  Benefit  Society,  42  Hun  (N.  Y.)  252,  proof  was  given 
showing  prima  facie  that  an  assessment  upon  the  members 
liable  to  contribute  to  the  death  fund,  would  have  been  ade- 
quate to  the  pa^'ment  of  the  loss  sued  for.  This  proof  was  the 
report  of  the  society  made  to  the  statfe  insurance  department 
only  a  few  days  after  the  death  of  the  member.  The  evidence 
was  objected  to,  as  not  the  best  evidence  of  the  facts  stated 
thereiu;  and  it  was  claimed  that  the  books  of  the  society  should 
have  been  produced.  The  court  says :  "  The  report  so  made  was, 
however,  of  equal  dignity  and  certainty  with  the  records  of  the 
society.  It  was  made  up  by  the  society  from  its  records — 
indeed,  \vas  itself  a  record  required  by  law  to  be  made  by  the 
society,  and  filed  in  the  insurance  department  as  a  record.  It 
was,  therefore,  competent  evidence  of  the  facts  therein  stated 
and  certified,  and  the  evidence  of  (a  witness)  went  merely  to 
calculations  in  elucidation  of  those  facts,  in  connection  witli  the 
table  of  the  defendant's  assessment  rates,  which  evidence  and 
table,  it  seems,  were  received  as  proof  without  objection.  The 
report  to  the  insurance  department,  with  the  other  proof  above 
referred  to,  made  ?i  prima  facie  case  against  the  defendant  on 

'  Mayer    v     Equitable      Reserve    also  Swett  v.  Citizens  Mutual,  etc.. 
Fund,  etc.,  42  Hun  (N.  Y.)  237;  See    7«  Me.  541 ;  7  Atl.  Rep.  394. 


Chap.  15,  §400.]        action  on  contract.  411 

the  point  of  its  ability,  with  due  diligence,  to  raise  a  death 
fund  sufficient  to  answer  the  claim  in  suit;  and  no  proof  what- 
ever was  given  or  offered  to  gainsay  such  'prima  facie  case. 
If  it  might  have  been  the  case,  as  is  suggested  by  the  defen- 
dant's counsel,  that  all  persons  M'ho  were  members  of  the 
society  December  31,  1885,  when  the  report  to  the  insurance 
department  was  made,  were  not  also  members  wlien  Darrow 
(the  deceased  member)  died,  but  twenty  days  previously;  and 
that  the  members  named  in  the  report  may  not  have  been 
solvent  and  able  to  pay  an  assessment  if  one  had  been  made; 
or,  that  each  and  every  assessment  would  have  been  ])aid  if 
made,  these  were  matters  to  be  shown  by  the  defendant 
against  what  was  fairly  inferable  from  the  case  as  made  by  the 
plaintiff'  on  the  evidence  submitted.  The  report  was  made 
during  the  time  within  which  there  should  have  been  an  asess- 
ment  to  meet  and  answer  the  plaintiff''s  claim.  It  was,  there- 
fore, to  be  inferred,  in  the  absence  of  all  proof  to  the  contrary, 
that  it  contained  the  facts  constituting  a  proper  and  adequate 
basis  therefor." 

§  400.  Evidence  continued.  Where  each  notice  of 
an  assessment  contained  a  statement  of  the  number  of  mem- 
bers liable — as  for  instance, — "We  have  now  eleven  hundred 
members  and  are  adding  thereto  daily." — "  We  have  eleven 
hundred  and  eighty-five  members"  etc.,  the  court  held  such 
statements  admissible  to  show  the  number  of  members;  and, 
it  being  shown  that  such  statements  were  made  only  a  short 
time  before  the  death  of  a  member,  the  court  held  that  this 
evidence  had  a  tendency,  at  least,  to  prove  that,  at  his  death, 
there  were  as  many  as  one  thousand  members,  and  was  ])rop- 
erly  submitted  to  the  jury  for  that  purpose.' 

Parol  evidence  is  admissible  to  show  the  number  of  mem- 
bers in  good  standing,  in  order  to  ascertain  the  sum  recoverable 
under  the  contract.^ 

The  number  of  certificates  of  membershij)  which  have  been 
issued  by  a  society  is  prima  facie  evidence  of  the  number  of 
members  in  good  standing,  and  the  burtlen  is  on  the  society  to 
show  that  any  persons,  to  whom  certificates  of  membership 
have  been  issued,  iiave  ceased  to  be  members  by  forfeiture, 

'    Fairchild     v.     North     Eastern  amount  to  be  paid  to  the  beneficiarj- 

Mutual  Life  Associatir)n.  51  Vt    613.  should    not    exceed    one    thousaml 

In  this  case  the  certilicate   provided  dollars. 

for  an   assessment  of  one   dollar  on         •    Hcnefit     Society     v.     Flietsam, 

each  surviving:   nionibcr   to   pay  the  Adni'r  97  111.  474. 
death  loss,  but  also  provided  that  the 


412  ACTION    ON    CONTRACT.  [ClIAP.  15,  §401. 

suspension,  or  otlierwise.  It  has  peculiarly  within  its  posses- 
sion the  means  of  showing  such  facts,  and  to  require  a  plain- 
tiff to  prove  a  negative  in  case  of  each  person  who  has  been 
received  into  membership, — that  such  person  had  not  been 
suspended,  or  had  not  forfeitedliis  membership,  would  be  un- 
reasonable and   impracticable.! 

§  401.  Burden  of  proof.  Where  the  contract  pro- 
vides that  the  society  shall  pay  as  many  times  a  certain  sum 
of  money  as  there  are  members  at  the  time  of  the  death  of 
the  member  insured,  or  where  it  merely  provides  that  an 
assessment  shall  be  levied  upon  the  surviving  members  and 
the  proceeds  thereof  paid  to  the  beneficiary,  the  burden  is 
on  the  plaintiff  to  prove  by  proper  evidence  the  number  of 
members  of  the  association,  or  the  amount  that  would  have 
been  realized  from  the  assessment. 

Where  the  contract  provides,  in  substance,  that  an  assess- 
ment shall  be  levied  upon  the  surviving  members,  and  the 
proceeds  thereof,  not  exceeding  a  cevtahi  named  sum,  shall 
be  paid  to  the  beneficiary,  the  society  is,  according  to  some 
authorities,  jprima  facie  bound  to  pay  the  maximum  amount 
of  its  liability  as  specified  in  the  contract,  and  the  burden  is 
on  the  society  to  prove  that  a  less  amount  would  have  been 
realized  by  an  assessment,' 

In  Elkhart  Mutual  Aid  etc.  v.  Houghton,  supra,  the  court 
says:  " The  certificates  each  provide  that  upon  the  death  of 
the  assured,  appellee  is  entitled  to  $1,000,  or  so  much  as  may 
be  realized  from  one  assessment,  etc.  The  undertaking  in 
each  certificate  is  for  $1,000,  unless  an  assessment  will  not 
produce  that  much.  That  an  assessment  would  not  produce 
$2,000  we  think  is  a  matter  of  defense  to  be  set  up  by  appellant. 
It  would  be  difficult,  if  not  impossible,  for  appellee  to  know 
how  many  members  of  the  association  there  are.  The  books 
of  the  association  doubtless  show  the  number.  These  books 
are  in  the  possession  and  custody  of  the  officers  of  the  associa- 
tion. If  the  members  are  such,  in  number,  that  an  assessment 
would  not  produce  $2,000,  that  fact  is  known  to  the  officers  of 
the  association,  and  they  should  set  it  up  in  an  answer,  and 
make  good  the  answer  by  proof,  as  they  readily  could,  if  true." 

'  Neskern    v.    N.    W.   Endow.   &  Rep.  465 ;     4  McCrary  149 ;    Kansas 

Legacy  Ass'n.,  30  Minn.  406.  Protective  Union  etc.   v.  Wliitt  etal. 

2  Elkhart  Mut  Aid  v.    Houghton,  37  Kan;  14  Pac  Rep.  275 ;  See  Suppi- 

103  Ind.  286   N.  E.   Rep.;    Lueders'  ger  v.   Covenant   Mut.   Ben.  Ass'n., 

Ex'r.    V.    Hartford  Life  etc.  12  Fed.  20  111.  App.  595. 


Chap.  15,  §401a.]      action  on  contract.  41  S 

In  Lueders'  Ex'r  v.  Hartford  Life  etc.,  siipi^a,  it  is  said: 
"  Despite  some  decisions  to  the  contrary,  this  court  cannot 
hold  otherwise  than  that  when  suit  has  to  be  brought,  the 
recovery  should  be  for  the  maximum  insured,  unless  the  defen- 
dant shows  by  pleadings  and  ])roof  that  said  sum  should  be 
reduced.  *  *  *  In  the  absence  of  any  proof  to  the  con- 
trary, the  sum  recoveral^le  should  be  against  the  corporation 
for  the  maximum  insured.  Any  other  rule  would  make  this 
insurance  scheme  a  mere  delusion  and  snare." 

§  401  a.  Burden  of  proof  continued.  An  inti- 
mation of  this  doctrine  is  contained  in  the  case  of  The  Coven- 
ant Mutual  Benefit  Association  v.  Hoffman  et  al.,  1 10  111. 
603,  where  the  Supreme  Court  of  Illinois  says:  "  It  was  pro- 
vided that  upon  due  notice  of  the  death  of  the  holder  of  the 
certilicate  being  filed  w'ith  the  secretary  of  the  association, 
showing  the  member  had  in  all  respects  complied  with  the 
conditions  of  the  certificate,  an  assessment  would  be  levied 
upon  all  the  members  holding  certificates  in  force  at  the  time 
of  the  death  of  such  member,  for  the  full  amount  named  in 
their  respective  certificates,  and  the  sum  so  collected  on  such 
assessments,  less  all  amounts  which  might  be  added  for  expen- 
ses and  collection  costs,  the  association  agreed  by  the  certifi- 
cate to  ])ay,  or  cause  to  be  paid,  as  a  benefit,  *  ^  *  *  • 
but  in  no  case  should  the  payment  under  the  certificate  exceed 
$5,000.00.  *  *  *  *  Across  the  face  of  the  certificate 
issued  to  the  deceased  was  printed  in  large  figures,  "$5000.00," 
which  would  seem  to  indicate  that  was  its  value."  ' 

In  Kansas  Protective  Union  v.  "Whitt  et  al.,  37  Kan.;  14 
Pac.  Rep.  275,  the  court  says:  "The  undertaking  on  the 
part  of  the  Union  was  to  pay  the  beneficiary  of  AVhitt,  after 
his  death,  $2,000.00,  but  not  to  exceed  75  per  cent,  of  the 
amount  of  the  assessment,  if  the  amount  exceeded  $2000. (>0. 
The  plaintiff  in  error  had  charge  of  these  accounts,  and  it  knew 
if  such  sum  would  be  realized  from  the  assessments.  The  bur- 
den of  proof  would  be  upon  the  company  to  sliow  the  amount 
realized  or  collected,  and  not  u]ion  the  ]>laintiffs." 

But  there  are  several  authorities  which  hold  that  the  fixing 
of  a  limit  to  the  amount  which  the  society  will  ])ay  from  the 
proceeds  of  the  assessment,  does  not  relieve  the  plaintiff  from 

'  See  Suppiger  v.  Covenant  Mu- 
tual Ben.  Association,  20  111.  App. 
595. 


414  ACTION    ON    ('ONTRACT.  [ChAP.  15,  §408 

showino;  the  amount  that  would  be  realized  from  an  assess- 
ment.i 

In  Ball  V.  Granite  State  Mutual  Aid  Association,  N,  H.;  9 
Atl.  Re\).  103,  it  was  held  that  in  an  action  on  a  certiiicate  of 
life  insurance  issued  bj  a  mutual  benefit  society,  by  the  terms 
of  which  the  plaintiff  is  entitled  to  the  amount  of  one  assess- 
ment, not  exceeding  live  thousand  dollars,  he  can  recover 
nominal  damages  only  in  the  absence  of  evidence  of  the 
amount  of  one  assessment.- 

§  403.  Measure  of  Daiiiag^es.  Generally  speaking, 
a  contract  of  life  insurance  is  not  a  contract  of  indemnity,  and 
where  a  society  agrees  in  its  policy  to  pay  a  specific  sum  of 
money  on  the  death  of  the  assured,  it  is  liable  for  the  amount 
so  fixed.  But  where  a  creditor  takes  out  insurance  on  the  life 
of  his  debtor  to  secure  a  debt,  only  the  value  of  his  interest  in 
the  life  of  the  assured  may  be  recovered. 

^  403.       Nominal  damages  in  an  action  at  laAv. 

When  the  contract  provides,  in  substance,  that,  upon  the  death 
of  a  member  in  good  standing,  an  assessment  shall  be  levied 
upon  the  surviving  members  and  the  proceeds  thereof  paid 
over  to  the  beneficiary,  there  is  a  conflict  of  authority  upon 
the  question  as  to  the  proper  measure  of  damages  in  an  action 
at  law  for  a  breach  of  the  agreement  to  levy  the  assessment 
and  pay  the  money.  Some  authorities  hold  that  in  such  an 
action  nominal  damages  only  are  recoverable.^ 

In  Newman  v.  Covenant  JVIut.  Ben.  Ass'n.,  Iowa,  33  N,  W. 
Rep.  662,  the  certificate  provided  that  "  an  assessment  shall  be 
levied  upon  all  the  members  holding  certificates  in  force  at 
the  time  of  the  death  of  said  members,  for  the  full  amount 
named  in  their  respective  certificates,  and  the  sum  so  collected 
on  such  assessments  *  -5^  *  the  association  agrees  to  pay 
and  cause  to  be  paid  to  '"  '"  *  *  ,  but  in  no  case  shall  the 
payment  under  this  certificate  exceed  $5,000."  The  court   says: 

1  Earnshaw  v.  Sua  Mutual  Aid  Ass'n.,  Iowa,  33  N,  W.  Rep  662 ; 
etc,  Md.;  11  Cent.  Rep.  508;  Curtis  Tobin  v.  Western  Mut.  Aid  Soc, 
V.  Mutual  Benefit  etc.,  48  Conn.  98;  Iowa,  33  N.  W.  Rep.  663;  Smith  v. 
Fairchild  v.  North  Eastern  Mutual  Covenant  Mut.  Ben.  Ass'n.  24  Fed. 
Life  Ass'n.,  51  Vt.  613;  Ball  v.  Rep.  685 ;  See  Garretson  v.  Equitable 
Granite  State  Mutual  Aid  Ass'n.,  N.  Mutual  etc.,  Iowa, ;  38  N.  W.  Rep. 
H.,  9  Atl.  Rep.  103.  127;  where  verdict  for  full   amount 

^  See    also    Fairchild    v.    North  limited  in  the  certificate  was    per- 

Eastern  Mutual  Life  Association,  51  mitted  to  stand  because  no  question 

Vt   613;  Obrien   v.    Home    Benefit  of  error  in  assessment   of   damages, 

Societ3^  46  Hun  426.  etc.,  was  raised  in  the  record. 

2  Newman  v.  Covenant  Mut.  Ben. 


Chap.  15,  §-±04.]        action  on  contract.  415 

"  The  theory  of  the  plaintiff  is  that  if  the  certificate  has  not 
been  forfeited,  and  the  defendant  disclaims  all  liability  to  ])ay 
the  claim,  and  refuses  to  make  the  assessment,  it  thereby  be- 
comes liable  to  pay  the  maximum  sum  named  in  this  certifi- 
cate, provided  its  membership  was  large  enough  to  have  pro- 
duced such  sum,  if  an  assessment  had  been  made,  and  all  the 
members  had  paid  their  assessments.  But  in  our  opinion  the 
plaintiff's  position  cannot  be  sustained.  The  extent  of  the  de- 
fendant's obligation  is  fixed  by  the  certificate  of  membership. 
The  association  does  not  agree  to  pay  any  sum  from  any  gen- 
eral fund,  nor  does  it  provide  any  general  fund.  It  merely 
agrees  to  levy  an  assessment  and  pay  over  such  sum  as  may 
be  collected  upon  it.  If  the  company,  doubting  or  denying 
its  liability  in  a  given  case,  refused  to  levy  an  assessment,  the 
contract  is  not  thereby  changed,  and  the  company's  liability 
extended.  It  may  be  conceded  that  a  wrongful  refusal  to  make 
an  assessment  would  be  a  breach  of  the  contract.  But  we  are 
unable  to  see  how  more  than  nominal  damages  could  be  re- 
covered for  such  bi»each.  No  evidence  was  introduced  in  this 
case,  and  none  could  have  been,  showing  how  many  members 
would  have  paid,  their  assessment,  and  how  many  would  have 
chosen  to  refuse  to  make  payment,  and  suffer  the  only  con- 
sequence of  such  refusal,  namely,  a  forfeiture  of  their  member- 
ships, nor  can  either  ])arty  invoke  any  presumptions  as  to  how 
many  would  have  paid,  and  how  many  would  have  refused 
payment.  As  to  tlie  wisdom  or  propriety  of  this  form  of  in- 
surance, or  the  difficulties  in  the  way  of  realizing  tlie  benefit 
under  the  certificates  issued,  the  courts  have  no  responsibility. 
It  is  for  them  to  enforce  the  contracts,  according  to  their  terms, 
which  the  parties  have  made  for  themselves.'" 

§  404.  Nominal  dainagres  continued.  In  Smith 
V.  Covenant  Mut.  Bun.  Ass'n.,  24  Fed.  Rej).  6S5,  the  contract 
of  insurance,  in  substance,  provided  that  on  the  death  of  a 
member  an  assessment  should  be  levied  upon  all  the  members, 
and  the  sum  so  collected  on  such  assessments  the  society  agreed 
well  and  truly  to  ])ay  to  the  beneficiary,  but  in  no  case  should 
the  payment  exceed  the  sum  of  twenty-five  liundred  dollars.  In 
discussing  the  measure  of  damages  in  a  suit  at  law  u])()n  the 
certificate,  Dyer  J.,  in  an  o))inion  concurred  in  by  Justice  Har- 
lan, says:     "Conceding  that  the  heirs  of  tlie  decedent  are  the 

'  This  case  is  followed  iuTobin  v. 
Western  Mut.  Aid  Soc,  Iowa,  33  N. 
W.  Kep.  063. 


416  ACTION    ON   CONTRACT.  [ClIAF.   16,  §404. 

legal  beneficiaries  entitled  to  the  benefits  conferred  by  the  cer- 
tificate, what  are  the  rights  of  the  parties  respecting  a  recovery 
upon  the  certificate  on  failure  of  the  association  to  pay  the 
death  loss?  The  theory  upon  which  the  suit  is  brought  is  that, 
as  in  the  case  of  an  ordinary  liffe  policy  of  insurance, the  plain- 
tiffs are  entitled  to  recover -the  full  surn  named  in  the  certili- 
cate  without  regard  to  the  levy  of  any  assessment  upon  cer- 
tificate-holders, or  the  collection  by  the  association  of  any 
amount  so  levied.  After  deliberate  consideration  of  the  ques- 
tion, we  are  of  opinion  that  this  is  an  erroneous  view  of  the 
relation  and  rights  of  the  parties  under  the  certificate.  The 
association  covenants  in  its  agreement,  not  absolutely  to  pay 
the  sum  of  |)2,o00,  but  to  levy  an  assessment  upon  all  mem- 
bers holding  certificates  at  the  time  of  the  death  of  the  de- 
ceased member,  and  to  pay  the  sum  so  collected  on  such 
assessment  as  a  benefit  to  the  designated  beneficiaries,  such 
payment  in  no  case  to  exceed  the  sum  of  $2,500.  Thus  it  is 
apparent  that  the  obligation  of  the  association  is  only  to  pay 
whatever  amount  is  collected  from  othey  certificate-holders, 
not  exceeding  the  sum  named.  Suppose  that  no  assessment 
whatever  is  made,  or  suppose,  an  assessment  being  made,  noth- 
ing is  collected,  is  the  association  liable  absolutely  for  the  sum 
named  in  the  certificate  in  an  action  like  the  present?  If  not, 
what  is  the  remedy  for  failure  to  levy  an  assessment,  or  for 
failure  to  collect  the  amount  of  an  assessment  actually  made, 
but  not  responded  to  by  the  holders  of  certificates?  If  it 
appeared  that  an  assessment  had  been  levied,  and  the  amount 
thereof  had  been  collected,  but  its  payment  to  the  beneficiary 
refused,  there  would  be  no  doubt,  in  the  absence  of  other 
grounds  of  defense,  of  the  plaintiff's  rights  to  recover  in  a 
money  action  the  sum  so  collected,  not  exceeding  $2,500.  But 
this  state  of  the  case  is  not  alleged.  And,  indeed,  it  was  ad- 
mitted on  the  argiiment  that  no  assessment  was  levied  to  pay 
this  loss,  and,  therefore,  no  sum  had  been  collected  for  that 
purpose  by  the  association  from  certificate-holders.  Hence 
the  difficulties  above  suggested.  It  seems  clear  that  the  right 
acquired  by  virtue  of  the  certificate  held  by  the  decedent 
was  to  an  assessment  upon  all  members  holding  certificates, 
and  the  payment  of  the  amount  collected  on  such  assessment 
within  a  prescribed  period  of  time,  the  assessment  not  to 
exceed  the  limit  of  the  particulai-  certificate.  We  were  at  first 
disposed  to  think  that  it  was  incumbent  upon  the  plain- 
tiffs, in  any  view  of  the  case,  to  make  a  demand  for  an  assess- 


Chap.  15,  §iOi.]        action  on  contract.  417 

ment  in  order  to  lay  the  foundation  of  a  recovery.  But  we  are 
now  convinced  that  the  duty  to  make  an  assessment  was  im- 
posed by  the  contract,  and  if'^the  association  failed  in  this  duty, 
the  beneliciaries  had  the  right,  by  appropriate  proceedings  to 
compel  tlie  performance  of  it.  Undoubtedly,  a  court,  in  such 
a  proceeding,  could  enforce  the  discharge  of  that  duty  l>y  com- 
pulsory measures  against  the  officers  and  managers  of  the  as- 
sociation, or,  perhaps,  through  its  own  officers,  by  making  the 
necessary  assessment  and  collection  at  the  cost  of  the  associa- 
tion, or  of  the  certificate-holders  assessed.  It  is  quite  clear 
that  every  certiiicate-holder  agreed  to  look  for  payment  to  the 
specific  mode  set  out  in  the  certificate;  that  is,  by  assessments 
and  collections  within  a  certain  limit  as  to  the  amount  to  be 
assessed.  The  holders  of  certificates  are  co-members  of  the 
association,  who  have,  in  effect,  agreed  to  insure  each  other, 
and  have  stipulated  as  to  the  mode  in  which  their  liability  to 
the  heirs  or  devisees  of  a  deceased  member  may  be  ascertained 
and  enforced.  But  this  plan  would  be  defeated  altogether  if 
such  heirs  or  devisees  could  obtain  a  judgment  against  the  as- 
sociation for  the  amount  limited  in  the  certificate,  without 
regard  to  any  assessment  or  any  amount  collected  on  an  assess- 
ment, and  enforce  payment  in  the  ordinary  mode  in  which 
judgments  for  money  are  enforced.  To  this  it  may  be  replied 
that  the  association  is  liable  to  suit  for  breach  of  covenant  if  it 
fails  to  make  the  recpiired  assessment.  This  may  be  so.  But,, 
if  so,  what  would  be  the  measure  of  damages?  To  say  that  the 
measure  of  damages  would  be  the  amount  of  the  certificate,, 
with  the  interest  from  date  when  it  should  have  been  paid,  and 
to  give  judgment  therefor  against  the  association,  would  be  to 
ignore  the  fact  that  the  parties  have  provided  a  specific  mode 
for  the  payment  of  the  sum  named  in  the  certificate,  viz.,  an 
assessment  against  and  collection  from  the  living  members. 
The  ordinary  life  ])olicy  rests  upon  the  promise  of  tlie  comj)any 
to  pay  the  sum  therein  named.  A  policy  holder  in  such  a  com- 
pany is  under  no  obligation  to  pay  anything  for  the  benefit  of 
the  holders  of  other  policies.  Ilere  the  insured  pays  seven 
dollars  to  insure  a  member  and  agrees  to  meet  mortuary  as- 
sessments from  time  to  time,  as  set  out  in  the  conditions  of 
the  certificate.  The  association  does  not  contract  absolutely 
itself  to  ])ay  the  sum  named  in  any  certificate,  but,  as  we  have 
seen,  only  that  it  will  assess  the  living  members,  and  ])ay  over, 
within  a  certain  time  the  sum  collected  on  such  assessment,  * 
*     -X-     *     ■»     'py  maintain  this  action  it  must  appear  that  thr 

27 


418  ACTION    ON    CONTRACT.  [ChAP.  15,  §405. 

association  has  in  its  hands  the  money  collected  bj  assessment, 
which  it  ought  to  pay  to  tiie  plaintiffs  as  the  beneficiaries  en- 
titled to  the  same." 

§  405.  Substantial  daiiiag-es  in  an  action  at 
law.  The  o]Mnions  of  the  Supreme  Court  of  Iowa,  Justice 
Harlan,  and  Judge  Dyer  are  of  great  weight  in  determining 
such  questions,  and  they  have  certainly  covered  the  ground 
thoroughly  in  the  presentation  of  the  arguments  in  favor  of 
the  position  assumed  by  them  in  these  decisions.  When  the 
language  of  these  opinions  has  been  quoted,  all  has  been  said 
that  can  be  said  from  that  standpoint. 

But  there  is  another  line  of  decisions  holding  that  substan- 
tial damages  may  be  recovered  on  such  a  contract  in  an  action 
at  law.  As  has  frequently  been  said  of  contracts  of  insurance 
upon  the  assessment  plan,  the  scheme  is  a  peculiar  one.  While 
courts  cannot  refuse  to  construe  and  enforce  peculiar  contracts, 
it  is  their  duty  to  construe  them  in  such  a  way  that  a  society 
may  not,  because  of  the  peculiar  form  and  terms  of  its  con- 
tract with  individuals,  avoid  an  action  at  law  for  the  breach  of 
its  agreement,  and  such  a  construction  of  the  contract  as  will 
deprive  the  beneiiciary  of  his  right  to  damages  at  law  for  a 
breach  thereof,  is  to  be  avoided,  unless  that  right  is  waived  in 
express  terms.''  The  contract  of  insurance  is  prepared  by  the 
society  in  advance,  and  in  the  construction  of  its  provisions  the 
member  and  his  beneiiciary  have  no  hand  whatever.  According 
to  a  familiar  maxim  of  the  law,  the  provisions  of  this  contract 
are  to  be  construed  most  strongly  against  the  society.  It  is 
safe  to  presume  that  some  available  and  substantial  measure  of 
indenmity  for  the  breach  of  the  agreements  made  by  the 
society,  was  contemplated  by  the  parties,  and  it  is  right  and 
just  to  presume  that  they  have  left  the  law  to  apply  its  usual 
remedies,  where  the  society  has,  in  the  contract,  placed  no  lim- 
itation upon  the  remedy  to  be  pursued  by  the  beneiiciary. 
All  the  authorities  agree  that  the  contract  has  been  broken, 
when  the  society  wrongfully  neglects  or  refuses  to  levy  an 
assessment,  and  the  question  under  discussion  is,  as  to  whether 
such  wrongful  neglect  or  refusal  shall  be  held  to  he  a  technical 
or  a  substantial  breach  of  that  contract,  or,  to  speak  more 
exactly,  whether  for  such  a  breach  of  contract  substantial  or 
merely  nominal  damages  may  be   recovered.     To   hold   that 

'■■  Burland    v.   N.  W-    Mut.     Ben.     Page,  31  Fed.  Rep.  184. 
Ass'n  ,  47  Mich.   424 ;  Hankinson  v. 


Chap.  15,  §406.]        action  on  contract.  419 

such  neoflect  or  refusal  is  a  technical  breach  of  the  contract 
for  which  nominal  damages  only  can  be  recovered  at  law;  and 
to  lay  down  the  rule  as  stated  in  the  cases  above  quoted, 
namely,  that  the  beneficiary  can  sue  at  law  only  for  the  pro- 
ceeds of  an  assessment,  and  not  for  damages  for  failure  to  collect 
the  proceeds  in  the  manner  ])rovided  for,  gives  to  the  parties 
an  anomalous  standing  in  court.  For  it  places  the  parties  to 
the  contract  in  an  anomalous  and  peculiar  position,  when  the 
society  is  permitted  in  a  court  of  law  to  say  that  nothing  but 
nominal  damages  is  due  the  plaintiff,  because  of  its  own  default 
in  not  doing  what  it  has  agreed  to  do;  when  the  society  is  per- 
mitted— as  in  Newman,  Trustee  v.  Covenant  Mutual,  etc., 
supra^  to  set  up  in  bar  of  the  action,  as  to  all  but  nominal 
damages,  its  own  default  in  not  making  and  collecting  an  as- 
sessment, and  paying  the  proceeds  to  the  beneficiary. 

As  sustaining  the  necessity  of  this  position,  it  is  not  suffi- 
cient to  say  that  the  contract  shows  upon  its  face  that  the 
society  has  no  funds  with  which  to  pay  a  judgment,  or  a  claim 
against  it  for  a  death  loss,  except  from  the  proceeds  of  assess- 
ments. Courts  have  nothing  to  do  with  the  physical  impossi- 
bility of  collecting  money  on  executions  on  their  judgments,  and 
if  they  had,  insolvent  debtors  would  be  active  in  setting  up  their 
insolvency  in  resisting  claims  against  them.  If  the  contract 
is  to  be  scrutinized  upon  this  princi])le,  and  the  adequacy  of 
the  remedy  looked  to,  it  miglit  be  answered  that  a  court  of 
equity  might  find  it  difHcult  to  enforce  a  decree  against  a 
foreign  corporation,  requiring  it  to  levy  an  assessment;  that 
such  a  court  might  find  it  exceedingly  difficult  to  collect  any- 
thing in  the  manner  suggested  by  Judge  Dyer  in  Smith'  v. 
Covenant  Mutual,  etc.,  supra^  namely,  ''  through  its  own 
officers,  by  making  the  necessary  assessment  and  collection  at 
the  cost  of  the  association,  or  of  the  certificate  holders 
assessed,"  or  to  enforce  a  forfeiture  of  membership  in  the 
society  for  non-payment  of  such  an  assessment. 

§  40G.     Keiiiedy  in  equity   discussed.      Xor    can 

the  necessity  of  such  a  position  be  sustained  u])on  the  theory 
that,  while  the  damages  at  law  are  so  uncertain  and  sj>ecu]a- 
tive  as  to  be  beyond  the  ])ossil)ility  of  legal  measurement, 
equity  furnishes  a  direct  and  adeipiatc  remedy.  The  sugges- 
tion that  equity  can  enforce  the  specific  performance  of  such 
a  contract  presents  to  our  minds,  at  first  impression,  an  easy 
solution  of  many  perplexing  questions,  but  an   inquiry    into 


420  ACTION    ON    CONTRACT.  [CeIAP.   15,  ^407. 

the  matter  developes  quite  as  much  uncertainty,  and  quite  as 
many  difficulties  as  can  possibly  arise  in  the  measurement  of 
damages  at  law.  The  membership  in  a  mutual  benefit  society 
is  constantly  changing.  On  the  one  hand,  new  members 
are  constantly  coming  into  the  society,  while  on  the  otliei-,  mem- 
bers die  from  time  to  time,  and  others  forfeit  their  meml)er- 
ship.  Suppose  that  a  beneficiary  should  file  his  bill  in  equity 
for  specific  performance  of  the  contract  to  levy  and  collect  the 
assessment,  and  at  the  end  of  six  months,  or  what  is  far  more 
likely,  a  year  and  six  months,  at  the  hearing  of  tlie  cause,  the 
chancellor  should  find  that  the  beneficiary  is  entitled  to  the 
benefit  fund,  and  that  an  assessment  ought  to  have  been  levied 
upon  the  surviving  members, — say  within  three  months  after 
the  death  of  the  assured;  what  decree  shall  the  cliancellor 
enter?  Shall  he  order  an  assessment  upon  all  members  in 
ffood  standing:  at  the  date  of  such  decree?  Such  an  assessment 
might  not  be  binding  upon  members  who  had  entered  since  the 
death  of  the  assured,  for  the  by-laws  of  such  societies  usually 
provide,  and  the  plan  of  mutual  benefit  insurance  contemplates, 
that  a  member  shall  not  be  liable  to  an  assessment  for  losses 
and  expenses  inctirred  prior  to  the  date  of  his  admission.  The 
levy  of  an  assessment  for  losses  and  expenses  incurred  prior 
to  the  admission  of  a  member  is  invalid  as  to  the  new  member, 
and  non-payment  of  such  an  assessment  will  not  work  a  for- 
feiture of  his  policy.' 


§  407.  Discussion  of  remedy  in  equity  con- 
tinued. But  assuming,  for  the  further  investigation  of  this 
question,  that,  under  the  insurance  contract  in  the  particular 
instance,  the  society  may  lawfully  assess  new  members  for 
deaths  occuring  prior  to  their  admission  into  the  society,  will 
such  a  decree  be  just  to  the  parties?  If  between  the  time  when 
the  society  should  have  levied  the  assessment,  and  the  time  when 
the  decree  of  the  court  is  executed,  the  membership  liable  to 
assessment  has  decreased  by  five  hundred  members,  the  court 
is  not  rendering  to  the  beneficiary  the  full  measure  of  his 
right.  And  if  during  that  time  the  membership  of  the  society 
has  increased  in  the  number  of  five  hundred  members,  the 
decree  will  give  to  the  beneficiary  a  larger  benefit  than  he  is 
entitled  to,  and  will  operate  nnjustly  and  oppressively  to  the 

'  Ins.  Co.  V.  Houghton,  6  Gray 
77;  Roswell  v.  Equitable  Aid  Union, 
13  Fed.  Rep.  840. 


OhAP.  15,  §408.]  ACTION    ON    CONTRACT.  421 

society.  Shall  the  chancellor  enter  an  order  requiring  the 
society  to  assess  only  those  members  who  were  in  good  standing 
at  the  date  when  the  assessment  sliould  have  been  levied?  If 
so,  what  account  is  to  be  taken  of  those  members  who  have  since 
that  time  died,  or  forfeited  their  membership?  If  the  inno- 
cent beneficiary  is  not  to  suffer  this  loss,  an  adjustment  must 
be  made  upon  the  same  principles  by  which  courts  of  law 
measure  the  damages  for  a  breach  of  the  contract  to  levy  the 
assessment;  and  a  court  of  equity  has  no  power  to  assess  dam- 
ages for  breach  of  the  contract.  What  decree,  then,  shall  the 
chancellor  enter,  wliich  will  demonstrate  the  alleged  peculiar 
and  adequate  remedy  which  may  be  administered  by  a  court 
of  equity? 

§  408.  Ordinary  legfal  remedy  for  breach  of 
contract.  The  truth  is,  the  more  we  analyze  this  plan  of 
insurance,  and  inquire  into  the  remedial  rights  of  the  parties 
to  the  contract,  the  greater  and  more  numerous  seem  to  be 
the  legal  dilKculties  wliich  present  themselves.  It  nuiy  be  that 
it  is  impossible  to  give  to  these  contracts  a  logical  and  harmon- 
ious construction.  Any  rule  which  a  court  may  lay  down  as 
to  the  remedial  rights  of  the  parties,  seems  to  do  violence  to 
some  provision  of  the  contract.  Under  these  circumstances, 
courts  have  generally  brushed  away  as  far  as  possible  those 
peculiarities,  anomalies  and  inconsistencies,  which  relate  to  mat- 
ters of  detail,  and  have  attempted  to  effectuate  the  general 
purposes  of  the  societies  by  the  ap])lication  of  general  |)rinci- 
ples  of  law.  A  reasonable  construction  of  the  above  contract 
between  the  society  and  the  member  is  that  the  beneficiary 
sluill  look  to  the  assessment  made  and  collected  by  the  society, 
for  the  ]myment  of  the  death  loss;  and  an  answer  or  plea  by 
the  society,  admitting  its  liability,  setting  up  the  levy  of  an 
assessment,  notice  thereof  to  its  members,  as  required  by  the 
contract,  and  alleging  that  no  money  had  been  received  by 
means  thereof,  within  the  time  stijuilated  for  the  payment  of 
such  assessments,  would,  certainly  state  a  good  defense,  to  the 
action.  But  where  the  society  denies  all  liability  on  the  con- 
tract, and  refuses  to  make  an  assessment  and  pay  the  benefit 
fund,  the  law  will  give  to  the  beneficiary  his  ordinary  remedy 
for  breach  of  a  contract,  and  hold  the  society  to  respond  in 
damages  in  such  an  amount  as  might  have  been  collected  by 
making  the  assessment. 

It  ought  not  to  be  a  matter  of  great  difficulty  to  show  with 
reasonable  certainty  what   could  have  been  realized  upon  an 


422  ACTION    ON    CONTRACT.  [CliAP.   15,  §409. 

assessment  at  any  given  time.  Members  die  from  time  to 
time,  and  assessments  are  made  every  few  weeks.  Some  con- 
tracts provide  that  they  shall  not  be  levied  more  than  once  in 
each  calendar  month.  Even  where  the  contracts  provide  that, 
after  proof  of  death  of  a  member  in  good  standing,  an  assess- 
ment shall  be  levied  without  delay,  the  officers  of  the  society 
may  exercise  their  discretion  about  waiting  a  reasonable  time 
before  making  the  assessment  for  the  payment  of  the  death 
loss,'  Yery  frequently  the  levy  is  postponed  for  a  few  days,  in 
order  that  notice  of  assessments  for  two  or  more  death  losses 
may  be  given  at  one  time.  It  will  be  an  easy  matter  to  show 
what  was  realized  upon  an  assessment  made  at  a  time  when  the 
assessment  upon  the  particular  certificate  of  membership  sued 
on,  might  have  been  made.  And  where,  by  custom,  or  the 
contract  of  insurance,  the  assessments  are  made  in  one  month 
for  all  death  losses,  of  which  proof  has  been  made  in  the  pre- 
ceding month,  the  amount  may  often  be  reduced  to  a  certainty. 
It  is  practically  impossible  for  litigation  to  arise  on 
such  a  contract  of  insurance,  unless  the  society  denies  its 
liability,  and  refuses  to  make  an  assessment.  When  the  society 
contests  the  claim,  it  certainly  cannot  complain  that  the  ordi- 
nary legal  remedy  is  unjust  or  unreasonable. 

§  409.  Bvirden  of  proof  and  measure  of  dama- 
ges discussed.  Courts  of  law  have  in  many  cases  taken 
notice  of  the  fact  that  ordinary  insurance  companies  "  send 
their  agents  all  over  the  land,  with  directions  to  solicit  and 
procure  applications  for  policies,  furnishing  them  with  printed 
arguments  in  favor  of  the  value  and  necessity  of  life  insurance, 
and  of  the  special  advantages  of  the  corporation  which  the 
agent  represents,"  that  "  they  pay  these  agents  large  commis- 
sions on  the  premiums  thus  obtained"  etc.  And,  from  these  facts, 
these  courts  lay  down  certain  doctrines,  and  among  them,  that 
the  powers  of  an  insurance  agent  are  prima  facie  co-extensive 
with  the  business  intrusted  to  his  care.'^  Courts  may  with 
equal  propriety  refuse  to  shut  their  eyes  to  the  fact  that  mutual 
benefit  societies  send  men  all  over  the  land  to  establish  subor- 
dinate lodges,  furnishing  them  with  printed  arguments  in  favor 
of  assessment  insurance,  as  against  ordinary  "  straight  line  " 
insurance, — wherein  these  societies  hold  out  to  their  members, 
and  all  persons  solicited,  the  hope  and  expectation  that  they 

'  Peoples  Ins.  Co.  v.  Allen  et  al.  "  Union  Mutual  etc.  v.  Wilkinson, 
10  Gray  (Mass.)  297.  13  Wall  223. 


Chap,  15,  §410.]        action  on  contract.  423 

may  pay  the  maximum  sum  limited  in  the  certiilcate  ;  and 
from  these  facts  courts  may  reasonably  and  justly  hold  that 
prima  facie  they  are  liable  for  the  maximum  amount  named 
in  their  policies,  and  must  assume  the  burden  of  allegino^  and 
proving  that  an  assessment  would  have  realized  a  less  amount. 
The  society  has  set  the  maximum  sum  it  will  pay  in  any  event; 
it  has  within  its  possession  the  records  which  show  the  number 
of  members  in  good  standing,  and  from  which  it  can  know 
with  reasonable  certainty  how  much  can  be  realized  from  an 
assessment,  and  this  rule  cannot  operate  harshly  or  oppres- 
sively. 


§  410.  Burden  of  proof  and  measure  of  dam- 
ages continued.  In  Newman  v.  Covenant  Mutual  etc., 
supra,  stress  is  laid  upon  the  fact  that  no  evidence  could  pos- 
sibly be  introduced  showing  how  many  members  would  have 
paid  the  assessment  on  the  certificate,  and  how  many  would 
have  refused  to  do  so,  and  the  court  says:  "Nor  can  either 
party  invoke  any  presumptions  as  to  how  many  would  have 
paid,  and  how  many  would  have  refused  payment." 

If  tliese  insurance  societies  carry  on  business  with  proper 
method  and  attention  to  details,  a  society  should  be  able  to 
show  by  proper  evidence,  and  with  reasonable  accuracy,  the 
proportion  of  those  who  forfeit  their  membership  by  non-pay- 
ment of  an  assessment,  as  compared  with  those  who  pay  an 
assessment.  From  the  fact  that  the  contract  is  unilateral, — 
payment  of  an  assessment  not  being  enforceable, — it  must  not 
be  assumed  that  a  great  number  of  members  forfeit  their 
membership  at  the  levy  of  an  assessment.  Men  enter  these 
societies  for  insurance  upon  tlieir  lives,  to  secure  at  their  death 
a  fund  for  the  benefit  of  their  wives,  children  and  other 
dependents,  and  it  is  I'easonable  to  suppose  that  they  will  use 
every  endeavor  to  pay  an  assessment,  when  non-payment  for- 
feits the  right  of  their  beneficiaries  to  such  fund.  The  history 
and  growth  of  mutual  benefit  societies  are  a  refutation  of  the 
idea  that  the  levy  of  an  assessment  causes  a  great  number  of 
members  to  forfeit  their  membershij). 

There  are  strong  reasons  why  a  beneficiary  may  invoke  pre- 
sumptions as  to  how  many  members  will  pay  and  how  many 
will  refuse  payment.  When  a  man  becomes  a  member  of  a 
society,  and  enters  into  a  contract  of  insurance  for  the  benefit, 
after  his  death,  of  those  who  are  dependent  upon  him,  he  does 
so  U})on  the  faith  that  the  society  has  the  ability  to   carry  out 


424  ACTION    ON    CONTKACT.  [ClIAP.  15,  ^411. 

its  part  of  tlie  contract.  The  society  has  presented  itself  to 
the  ■world  as  an  insurance  organization.  In  the  printed 
matter  which  it  carefully  circulates,  it  reminds  the  reader  of 
his  duty  to  provide  for  those  dependent  upon  him,  by  insur- 
ance upon  his  life,  and  recommends  the  scheme  adopted  by  it, 
as  the  best  method  by  which  men  may  accomplish  that  object. 
When  a  loss  has  occurred  u])on  its  contract,  a  society  should 
not  be  heard  to  argue  that  its  means  of  raising  the  benefit 
fund  are  so  speculative  and  uncertain  that  the  damages  for  a 
failure  to  collect  the  proceeds  of  an  assessment  cannot  be 
measured.  But  it  is  just  to  presume,  in  favor  of  the  benefi- 
ciary, and  against  the  society,  that  every  member  will  pay  his 
assessment  on  the  certificate,  and  to  require  the  society  to  show 
by  satisfactory  evidence  the  number  of  those  who  would  not 
have  paid. 

§  411.  Burden  of  proof  and  measure  of  dam- 
ages continued.  The  society  has  it  in  its  power  to  demon- 
strate to  a  mathematical  certainty  the  result  of  an  assessment 
on  the  certificate.  When  a  claim  is  made  against  the  society 
on  one  of  its  contracts  recognizing  him  as  a  member  in  good 
standing,  the  presumption  is  that  the  assured  died  in  good 
standing,  and  the  burden  is  on  the  society  to  allege  and  show 
the  fact  that  he  did  not  so  die.  It  can,  therefore,  levy  an 
assessment  upon  its  members  which  they  must  pay  within  the 
stipulated  time  after  notice,  on  penalty  of  forfeiture  of  their 
claims  upon  the  society.  The  proceeds  of  this  assessment  may 
be  held,  pending  the  investigation  or  litigation  of  claim,  and, 
if  the  claim  is  defeated,  may  be  used  in  the  payment  of  other 
losses.  While  a  society  might  probably  levy  an  assessment 
under  such  circumstances  and  conditions  as  would  estop  it 
from  denying  the  validity  of  a  claim,  yet  the  mere  levy  of  an 
assessment  for  a  death  loss,  unaccompanied  by  any  act  recog- 
nizing the  validity  of  a  contract  of  insurance,  is  not  a  waiver 
of  a  f'orfeitui-e ;  and  the  fact  that  after  the  death  of  a  member, 
the  other  members  paid  in  their  voluntary  assessments  to  meet 
the  amount  of  insurance,  gives  the  beneficiary  no  additional 
ridits.'  As  said  bv  Judge'Dyer  in  Smith  v.  Covenant  Mutual, 
etc.,  supra;  "  if  it  appeared  that  an  assessment  had  been  levied, 

■Swett  V.  Citizens  Mutual  etc., 
78  Me.  541.  17  Atl.  Rep.  394;  Mayer 
v.  Equitable  Reserve,  eta ,  43  Hun 

(N.  Y.)237. 


Chap.  15,  §412.]        action  on  contract.  425 

and  the  amount  thereof  had  been  collected,  but  its  payment  to 
the  beneticiaries  refused,  there  would  be  no  doubt,  in  the 
absence  of  other  grounds  of  defense,  of  the  plaintiff's  right  to 
recover  in  a  money  action,  the  sum  so  collected,  not  exceed- 
ing $2,500.00."  As  the  levy  of  an  assessment  does  not  of  itself 
estop  the  society  from  setting  up  "  other  grounds  of  defense;" 
as  the  society  can,  by  comph'ing  with  its  own  agreement  to 
levy  an  assessment  upon  its  members  measure  accurately  the 
damages  which  the  plaintiff  is  entitled  to  recover,  in  case  the 
"other  grounds  of  defense"  are  not  sustained  in  the  suit,  why 
should  not  the  plaintiff  "  invoke  any  presumptions  as  to  how 
many  would  have  ])aid,  and  how  mam^  would  have  refused 
payment?" 

§412.    Measures  of  da iniig-es  in  a  certain  case. 

A  mutual  benefit  society  issued  a  certificate  of  membership, 
agreeing,  upon  the  death  of  a  member,  to  levy  an  assessment 
of  one  dollar  on  each  surviving  member,  and  to  pay  the  pro- 
ceeds of  such  assessment  to  his  widow. 

Afterward  in  November  1869,  the  member  disap])eared. 
In  June  1871,  the  board  of  directors  of  the  society,  passed  a 
resolution  declaring  themselves  satisfied  of  his  death,  and 
ordering  an  assessment,  though  no  regular  proof  of  his  death 
was  ever  presented  as  required  by  the  contract.  When  the 
order  of  the  board  of  directors  was  made,  there  were  six  hun- 
dred and  forty-nine  members,  but  at  the  time  of  his  disappear- 
ance the  membership  was  much  lai-ger.  The  widow  and  the 
society  could  not  agree  upon  the  amount  that  should  be  paid 
to  her,  and,  on  the  trial  of  an  action  brought  by  the  widow 
against  the  society,  the  jury,  under  the  charge  of  the  court, 
found  a  verdict  for  the  ])laintiff  for  the  sum  of  $649.00. 

On  the  appeal  of  the  widow,  the  Supreme  Court  of  Georgia, 
held  that  the  amount  of  the  verdict  was  substantially  correct; 
that  the  assessment  should  be  made  on  those  who  were  mem- 
bers of  the  society  at  the  date  of  the  resolution  of  the  direc- 
tors, and  not  on  such  as  were  members  at  the  time  of  the  dis- 
ap])earance.  In  the  opinion  the  court  says:  "  Whether  the 
defendant  could  have  resisted  the  ])ayment  of  the  ])hiiiititt''s 
chiim  for  want  of  the  ])ro])er  jiroof  of  INfiller's  death,  if  tlie 
foregoing  action  of  its  board  of  dii-ectors  had  not  been  taken, 
it  is  not  necessary  to  decide;  but  even  the  action  of  the  board 
of  directors  does  not  fix  the  time  of  Miller's  death.  Iiuismueli 
as  tlie  ])laintiff  relies  on  this  action  of  the  defendant's  board 
of  directors  to  show  its  liability  to  her  for  the  ileath  of  Miller, 


426  ACTION    ON    CONTRACT.  [ClIAP.   15,  §412. 

the  basis  of  her  recovery  should  have  been  the  number  of 
members  belonging  to  its  company,  of  Miller's  class,  liable  to 
be  assessed  at  the  time  the  defendant  recognized  the  death  of 
Miller,  and  ordered  the  assess^nent  to  be  made,  and  not  the 
number  of  that  class,  which  belonged  to  its  company  at  the 
time  of  the  reported  disappearance  of  Miller,  in  November 
1869,  the  defendant  not  being  satisfied  from  the  evidence  then 
before  it  (the  same  not  being  such  as  its  by-laws  required) 
that  he  was  dead.  The  defendant  is  made  liable,  not  because 
the  death  of  Miller  was  proved  in  accordance  with  the  require- 
ments of  its  by-laws,  but  because  it  recognized  his  death  in 
June  1871.'" 

'  Miller  v.  Georgia  Masonic,  etc., 
Company,  57  Ga.  221. 


Chap.  15,  §413.]        action  on  contract.  427 


Action  on  the  Contract  of  the  Society.— Part  IV. 


Sec.  413.  I  Effect  of  expulsion  on  the  claim  of  an  expelled  member  for 
Sec   414.  J  benefits. 

§  413.  Effect  of  expulsion  on  claim  of  ex- 
pelled  member  for  benefits.  If,  before  a  memljer  has 
been  expelled  from  a  society,  he  becomes  entitled,  under  the 
contract  of  membership,  to  certain  benetits  promised  by  the 
society,  his  subsequent  expulsion  will  not  prevent  him  from 
maintaining  an  action  for  such  benefits.'  A  legal  expulsion, 
however,  at  once  terminates  the  contract  of  membership,  and 
determines  the  member's  right  to  future  benefits.^ 

Where  a  member  makes  a  claim  against  a  society  for  bene- 
fits, and  is  expelled  because  such  claim  is  found  to  be  fraudu- 
lent, the  expulsion  of  the  member  for  such  cause  is  a  bar  to 
any  inquiry  by  the  courts  into  the  merits  of  the  claim.  The 
society  possessed  jurisdiction  of  the  subject  matter  in  the 
proceedings  in  expulsion,  and,  in  expelling  the  member,  acted 
in  a  judicial  capacity.  Its  decision  will  not  be  collaterally 
inquired  into  by  the  courts,  but  will  be  held  as  binding  be- 
tween the  parties  until  set  aside  on  appeal  to  the  higher  tribu- 
nals of  the  society,  or  on  application  for  re-instatement  in  the 
courts.  So  long  as  the  judgment  of  expulsion  for  presenting 
the  fraudulent  claim  remains  in  force,  the  courts  will  regard 
it  as  settled,  between  the  member  and  the  society,  that  the  claim 
is  fraudulent  and  without  merit.  The  plaintiff,  a  member  of 
the  defendant  lodge,  claimed  certain  benetits  on  account  of  al- 
leged disability,  but  the  same  were  denied  by  the  lodge,  and  he 
appealed  to  the  grand  master  under  the  rules  of  the  order,  who 
reversed  the  decision  of  the  lodge,  but  the  lodge  apj^ealed,  under 
the  rules,  to  the  grand  lodge;  and  meanwhile  the  defendant 
lodge  had  expelled  the  plaintiff  for  fraud  and  deceit  practiced  in 
his  efforts  to  receive  the  benetits  in  question,  and  this  action  of 
the  defendant  lodge  was  also  carried  by  appeal  to  the  grand 
lodge,  and  the  grand  lodge  considered  the  last  ajipeal  first,  and 
found  ]>laintitt"  guilty  of  fraud  and  deceit  as  alleged,  and  sus- 

'  Bachman  v.  Arbeiter-Bund,  64  '  Pfeiffer  v.  Wcisshaupt,  13  Daly 
How.  Pr.  442.  161. 


428  ACTION    ON    COxNTRACT.  [ClIAP.  15,  §414. 

tained  the  action  of  the  defendant  lodge  in  expelling  him 
therefor,  and  afterward  the  grand  lodge  further  refused  to 
consider  the  first  appeal  because  the  merits  of  the  cases  were 
involved  in  and  determined  by  the  decision  of  the  second  appeal. 
The  court  held  that  these  facts  constituted  an  adjudication  of 
the  question  involved  in  the  first  appeal,  to  the  effect  that 
plaintiff  was  not  entitled  to  the  benefits  claimed,  and  that 
upon  a  showing  of  these  facts,  the  district  court  ])roperly  dis- 
missed the  action  brought  to  recover  the  ameunt  of  such  bene- 
fits  from  the  defendant  lodge.' 

§414.  Same  subject  contiiiiied.  Where,  by  the  by- 
laws of  a  mutual  benefit  society,  it  is  provided  that  if  the  in- 
sured member  misrepresent  his  habits  as  temperate,  the  board 
of  directors,  upon  hearing,  may  drop  his  name  from  member- 
ship, the  action  of  the  board  upon  the  charge  is  conclusive 
and  res  adjudicata,  and  it  may  not  be  inquired  into  in  a  suit 
on  the  certificate  of  membership  after  the  death  of  the  in- 
sured." 

Where  a  member  has  been  expelled  from  a  voluntary  so- 
ciety, he  may  not  collaterally  question  the  rightfulness  of  his 
expulsion  by  a  suit  to  recover  the  benefits  to  which  he  would 
otherwise  have  been  entitled.  He  must  first,  if  unjustly  ex- 
pelled, procure  his  restoration  to  membership. =* 

'  Woolsey  v.  I.  O.  O.  F.,  etc.,  61  ^  Anacosta  Tribe  v.  Murbach,  13 
Iowa  493;  See  Society  v.  Vandyke,  Md.  91;  Society  v.  Vandyke,  2 
2  Whar,  (Pa.)  309.  Wharton  (Pa.)  309. 

*  Jones  V.  National  Mutual  Bene- 
fit Association,  (Ky.,)  2  S.  W.  Rep. 
447. 


CHAPTER  XVI. 


Payment  of  Benefit  Fund. 


Sec.  415.  Payment  is  not  a  gift. 

Sec  417  \  ^^7"^^^*  to  wrong  person,  rights  of  parties. 

Sec.  418.  Payment  to  designated  beneficiary. 

Sec.  419.  Change  of  beneficiarj' — to  whom  paj'ment  may  be  made. 

Sec.  420.  Member  may  not  enjoin  payment. 

Sec.  421 .  Payment  from  reserve  fund,  discretion  of  officers. 

Sec.  422.  Payment  of  money  into  court.     Interpleader  etc. 

Sec  423.  Payment  of  less  amount  than  is  due,  receipt  in  full,  etc. 

Sec  424.  Payment  procured  by  fraud  upon  society. 

Sec  425.  Settlement  procured  by  Iraud  of  society. 

Sec  426.  Proceedings  to  obtain  payment  of  judgment  against  society. 

Sec.  427.  Restricting  operation  of  judgment  against  society. 

Sec.  415.  Payment  of  a  gift.  The  paymenti^by  a 
mutual  benelit  society  of  the  benetit  fund  to  the  beneficiary 
named  in  the  contract  of  insurance  is  not  voluntary,  and  in  the 
nature  of  a  gift.  It  is  the  fultilment  of  the  contract  of  insur- 
ance entered  into,  for  a  valuable  consideration,  between  the 
member  and  the  society  for  the  benefit  of  the  beneficiary.  If, 
therefore,  payment  be  made  by  the  society  to  the  wi-ong  per- 
son, under  the  mistaken  belief  that  he  is  the  proper  benefi- 
ciary, when  he  is  not,  the  society  may  recover  the  money 
back.' 

§  410.  Payment  to  wrong-  jierson,  rights  of 
parties.  If  a  person,  not  the  proper  beneficiary  under  the 
contract  of  insurance,  has  received  money  paid  to  him  in  the 
belief  that  he  was  the  proper  beneficiary,  the  law  implies  a 
promise  on  his  part  to  pay  it  over  to  the  rightful  owner.  The 
beneficiai-y  may  recover  from  him  the  amount  thus  wron<rfullv 
received. 

'Townsend  v  Crowdy,  8  C.  B.  (N.  v.  McGilorav,  4  Gray  51S;  National 
S.)98  E.  C.  L.  477;  Kelly  v.  Solari,  Life  Ins.  Co.  v.  Minch.  5:?  N.  Y. 
9  Mees.  &  W.  54;  Dails  v.  Lloyd,  12     144. 

Q.  B.  04  E.  C  L.  531 ;  Appleton  Bank        » Bolton  v.  Bolton,  73  iMe.  299. 

(429) 


430  PAYMENT   OF    BENEFIT.  [ClIAP.  16,  §417. 

Where  money  has  been  paid  without  cause  or  consideration 
to  one  who  was  not  entitled  in  law,  honor  or  good  conscience 
to  receive  it,  the  person  paying  it  may  recover  it  back,  pro- 
vided it  was  paid  under  a  palpable  misconception  of  the  law 
essentially  bearing  upon  and  affecting  the  contract. 

A  mutual  benetit  society  issued  a  certificate  of  membership 
bv  which  it  agreed  to  pay  the  benetit  fund,  upon  the  death  of 
the  member,  to  a  person  who  was  not  a  member  of  his  family. 
"When  the  certificate  was  issued,  the  ofhcers  of  the  society  be- 
lieved that  it  had  the  right  under  its  charter  to  make  such  a 
contract,  and,  after  the  death  of  the  member,  they  paid  to  the 
beneficiary  named  in  the  certificate  the  amount  of  the  benefit 
fund,  believing  that  he  was  entitled  to  it  under  the  contract. 
Under  the  charter,  the  society  had  no  power  to  make  such  a 
contract,  for  by  its  terms  the  fund  was  payable  to  the  widow 
and  children  of  the  member  taking  out  a  certificate,  and  it 
could  not  be  diverted  from  these  charter  beneficiaries  by  any 
act  of  the  society  or  the  member.  Afterward  the  widow  and 
children  of  the  deceased  member  brought  an  action  against 
the  society  to  recover  the  benefit  fund,  and  the  society  insti- 
tuted a  proceeding  against  the  person  to  whom  it  had  paid  the 
fund  to  recover  the  amount  which  it  had  paid  under  a  mistake  of 
law.  The  court  held  that  the  society  might  recover  the  amount 
which  it  had  paid  to  such  person  under  a  mistake  of  law,  less 
the  amount  of  all  assessments  which  he  had  paid  upon  the  certifi- 
cate, and  the  amount  expended  by  him  in  making  out  proofs 
of  loss,  and  further  held  that  he  was  chargeable  with  interest 
only  from  the  date  of  the  judgment.' 

§417.  Same  subject  continued.  The  payment  by 
the  society  of  the  whole  amount  of  the  benefit  fund  to 
certain  persons,  under  the  supposition  that  they  are  the  heirs 
at  law  of  the  beneficiary,  and  entitled  to  the  fund,  is  no  defense 
to  a  claim  of  one  of  such  heirs,  to  whom  no  payment  has  been 
made,  for  his  share  thereof.'' 

Where  the  charter  expressly  provides  that  the  widow  and 
children  of  a  deceased  member  shall  take  the  benefit  fund,  they 
are  entitled  to  it,  even  though  the  certificate  is  made  payable 
to  another  person,  and  the  charter  beneficiaries,  as  between 
themselves  and  the  beneficiary  named  in  the  certificate,  do 

'  Gibson  v.  Ky.    Granger's    Mut.        '^  Mutual  Aid  Society    v.     Miller, 
Ben  Society,  8  Ky.  L.  Rep.   (Sup'r.    107  Pa.  iSt.  162. 
Ct.)  520. 


Chap.  16,  §■115.]         payment  of  benefit.  431 

not  waive  their  right  to  the  fund  by  consenting  that  it  may  be 
paid  to  him,  unless  there  is  some  consideration  for  the  waiver, 
or  something  to  operate  as  an  estoppeL' 

The  innocent  payment  by  the  society  of  the  benefit  fund  to 
the  person  whom  the  deceased  member  in  his  lifetime  desig- 
nated as  his  beneficiary  and  represented  to  be  his  wife,  is  a  bar 
to  the  claim  of  the  widow  against  the  society. 

A  society  was  formed  for  "•  benefiting  and  aiding  the 
widows  and  orphans  of  deceased  members  "  and  its  by-laws 
provided  that  a  member  might  designate  his  beneficiary,  and 
if  no  designation  were  made,  then  the  fund  should  be  paid  to 
the  widow,  child  or  children,  mother  or  legal  heirs,  in  the  order 
named.  A  member,  before  his  death,  made  the  following 
direction:  "  The  payment  allowed  to  me  by  the  constitution 
and  by-laws  of  the  grand  lodge  to  be  made  to  Fanny  Supplee 
(my  wife)."  Under  this  designation,  the  fund  was,  after  the 
death  of  the  member,  paid  to  the  person  named.  This  person 
never  had,  in  point  of  fact,  been  the  wife  of  the  deceased  mem- 
ber, who  had  been,  during  the  whole  period  of  his  membership, 
married  to  another  woman.  The  widow  brought  suit  against 
the  society  for  the  amount  of  the  benefit  fund,  and  it  was  held 
that,  in  absence  of  notice  to  the  proper  officer  of  the  society,  or 
of  the  subordinate  lodge  to  which  the  deceased  member 
belonged,  that  she  was  the  widow,  prior  to  the  payment  to 
the  beneficiary  designated,  she  was  not  entitled  to  recover.' 

AVhere  a  society  has  paid  over  the  benefit  fund  to  the 
assignee  of  a  certificate  on  the  faith  of  the  assignment,  and  the 
original  beneficiary  seeks  to  recover  the  benefit  fund  on  the 
ground  of  fraud  upon  the  member  by  the  assignee,  before 
recovery  may  be  had  against  the  society,  it  must  be  shown 
that  it  had  notice  of  the  fraud  prior  to  the  payment  to  the 
assignee.* 

§  418.     Payment     to     designated     beiielieiary. 

AVhere  a  ])arty  insures  his  life  in  favor  of  a  person  who  has  no 
insurable  interest  in  his  life,  and  the  society  pays  the  amount 
to  the  persons  stipulated  in  the  contract,  the  society  will  not 
be  compelled  to  pay  it  again  to  the  executrix  of  the  estate, 
^dthough  notified  not  to  ])ay  the  beneficiary  by  the  heir  and 
widow  of  the  deceased. 

'Gibson   v.  Ky.   Grangers     Mut.  280;  See  g  181,  239. 

Ben.  Societ3\  svpra.  ^  N.  W.  Mutual   etc.    v.    Itoth,  87 

^  Supplee   V.  Kiiiirhts  of  Blrmiiisr-  Pa.  St.  409. 
ham,  etc.,  18  Weekly-  Notes  of  Cases, 


432  PAYMENT   OF   BENEFIT.  [ChAP.  16,  §421. 

A  member  died  leaving  a  will  in  which  he  left  all  his  pro])- 
erty  to  his  wife  and  grand  children.  There  was  a  policy  of 
insurance  upon  liis  life  in  favor  of  Catherine  Bernhard,  who 
had  no  insurable  interest  in  his  life.  Notice  was  given  by  the 
widow  and  heirs  to  the  society. that  they  claimed  the  benefit 
fund,  and  that  it  must  not  be  paid  to  the  beneficiary  named  in 
the  policy.  But,  in  disiiegard  of  such  notice,  the  society  paid 
it  to  the  beneficiary  named  in  the  certificate  of  membership. 
The  court  says:  "The  defendant  paid  the  money  according 
to  the  terms  of  its  contract,  and  to  the  person  named  in  the 
certificate  of  membership.  The  company  did  not  agree  to  pay 
the  amount  of  the  insurance  to  the  estate  of  the  person,  on 
whose  life  the  risk  was  taken.  *  v^  *  *  There  was  no 
contract  with  the  widow  and  heirs,  and  no  right  of  action  or 
legal  capacity  existed  in  them,  as  such,  to  collect  the  money  or 
to  forbid  its  payment  to  the  beneficiary." ' 

§  419.  Change  of  beneficiary;  to  whom  pay- 
ment may  be  made.     In  Manning  v.  A.  O.  U.  W.,  Ky., 

5  S.  W.  Rep.  385,  it  was  held,  that  where  a  member  had 
changed  the  designation  of  his  beneficiary  in  a  manner  other 
than  that  provided  for  in  the  laws  of  the  society,  and  the  so- 
ciety had  consented  to  such  change,  and,  after  the  death  of  the 
member,  had  paid  the  benefit  fund  to  the  beneficiary  in  whose 
favor  the  change  had  been  made,  the  original  beneficiary  could 
not  maintain  an  action  for  the  fund." 

§  430.     Member  may  not  enjoin  payment.       A 

member  of  the  society,  as  such,  has  no  interest  in  the  benefit 
fund,  and  cannot  maintain  a  suit  to  enjoin  the  society  from 
paying  it  to  a  person  who  claims  to  be  the  beneficiary  under 
one  of  its  certificates.' 

§  431.  Payment  from  reserve  fnncl — Direc- 
tion of  officers.  The  board  of  directors  or  other  officers, 
charged  with  the  management  of  the  affairs  of  the  society,  and 
the  payment  of  death  losses,  must,  of  necessity,  be  permitted 
to  exercise  their  discretion  to  a  great  extent  in  the  payment  of 
death  loses  out  of  any   reserve  fund  in  the  treasury    of    the 

'  Bomberger  Ex't'r  v.  Union  Ben.  ^Elsey  v.  Odd  Fellows,  etc  Ass'n. 

Mut.  Aid   Society,   (Pa.   St.)    (5  Atl.  Mass.;  7  N.  E.  Rep.  844;  See   Sands 

Rep.  41.  V.  Hill,  43   Barb.   (N.    Y.)    65.    at  § 

»  See  Chapter  XII.     Part  I.  379. 


ClIAP.  16,  §422.]  PAYMENT    OF    BENEFIT.  433 

society.  AYhere  the  reserve  fund  lias  not  exceeded  any  limit 
which  the  law  may  have  placed  upon  the  amount  that  may  be 
held  as  a  reserve,  it  must  be  left  to  the  discretion  of  such  offi- 
cers, whether  they  will  pay  a  loss  in  whole  or  in  part  from  the 
reserve  fund,  or  levy  an  assessment  upon  the  members  to  ])ay 
it.  The  idea  of  a  reserve  fund  imports  permanency  to  some 
extent,  and,  if  losses  were  required  to  be  paid  out  of  this  fund 
as  they  occurred,  the  fund  would  soon  be  depleted  and  des- 
troyed ;  the  very  object  for  which  it  was  created  would  be 
defeated.  A  member  cannot,  therefore,  insist  that  the  amount 
of  money  held  in  the  reserve  fund  be  applied  to  the  payment 
of  losses  before  he  shall  be  required  to  pay  his  assessment. 
The  officers  of  the  society  may  use  a  part  or  all  of  the  fund 
to  pay  death  losses,  but  they  cannot  be  compelled  to  do  so.  It 
is  in  their  discretion  to  hold  the  reserve  fund  and  lay  an  assess- 
ment to  pay  the  loss." 

A  statute  providing  that  a  mutual  benefit  society  "  shall 
have  the  right  to  hold,  at  any  one  time,  as  a  death  fund, 
belonging  to  the  beneficiaries  of  anticipated  deceased  members, 
an  amount  not  exceeding  one  assessment,"  does  not  require 
that  losses  as  they  occur  shall  be  paid  from  this  fund,  but  the 
officers,  in  their  discretion,  may  lay  an  assessment  to  pay  such 
losses.^ 

§  432.  Payment  of  money  into  court.  Inter- 
pleader, etc.  An  action  was  originally  brought  by  the 
plaintiff  against  a  mutual  benefit  society,  to  recover  the  sum 
of  $3,000.00  which  she  claimed  was  due  to  her  upon  a  benefit 
certificate  of  said  society  held  by  her  husband,  at  the  time  of 
his  death.  The  society  did  not  dispute  the  indebtedness,  but 
alleged  that  several  other  persons  made  claim  to  the  benefit 
fund,  naming  such  persons  ;  asked  to  be  permitted  to  pay  the 
money  into  court,  and  that  the  contestants  for  the  fund  be 
made  defendants  in  its  ])lace;  and  thereupon  was  permitted  to, 
and  did  ])ay  the  money  into  court.  The  contestants  were  made 
defendants  in  its  phice,  and  the  action  was  dismissed  as 
to  the  society.  In  discussing  the  effect  of  this  payment  of 
the  fund  into  court,  the  Sujireme  Court  of  Wisconsin  says: 
"The  fact  that  the  association  has  paid  the  money  into  court, 
instead  of  paying  it  directly  to  the  widow,  to  avoid  litigation 
with    the  other  claimants,  can  make  no  difference  as  to  the 

'  Grossman  V.  Mass.   Mutual,  etc.,        '  Grossman  v.  Mass.   Mutual,  etc 
Mass;  9  N.  E.   Rep.  753;  See    g  S-    supra.  ' 

133,  134,  282. 


434  PAYMENT    OF    BENEFIT.  [ClIAP.  16,  §423. 

rights  of  the  persons  claiming  the  same.  If  the  appellant 
could  not  have  recovered  this  money  in  a  direct  action  against 
the  association,  he  cannot  recover  it  in  this  action.  The  asso- 
ciation not  haviiig,  for  prudential  reasons,  paid  the  money  to 
the  party  entitled  thereto,  the  court  must  see  that  it  is  paid 
out  as  directed  and  required  by  the  rules  and  regulations  of 
the  society.  *  *  *  *  It  is  quite  immaterial  whether  the 
local  council  or  the  supreme  council  have  the  right,  under  the 
rules  and  regulations  of  the  order,  to  direct  to  whom  the 
money  shall  be  paid,  in  case  the  brother  has  failed  to  designate 
the  person  in  the  manner  prescribed  by  such  rules.  The 
money  having  been  paid  into  court,  the  court  must  now  deter- 
mine who  is  the  proper  person  to  receive  the  money,  irrespec- 
tive of   the  action  of  either  council."  ' 

§  433.  Payment  of  less  anioiiiit  than  is  clue; 
receipt  in  full,  etc.  The  son  of  a  member  of  a  mutual 
benefit  society,  being  in  fact  entitled  to  the  whole  fund  pay- 
able on  his  father's  death,  his  guardian,  on  making  claim 
therefor,  was  informed  by  the  president  that  only  a  part  of 
fund  was  due  to  the  son,  and  that  the  balance  belonged  to 
another  person,  who  had  been  named  as  a  beneficiary.  The 
guardian,  in  good  faith,  without  disputing  this,  accepted  a 
smaller  sum,  and  signed  a  receipt  in  full.  The  remainder  of 
the  money  was  then  paid  to  the  person  supposed  to  be  entitled 
thereto.  It  was  held  that  a  suit  might  still  be  maintained  by 
the  son  for  the  balance  of  the  fund,  and  that  the  guardian's 
passive  assent  to  the  paj'ment  of  the  balance  to  the  wrong  per- 
son did  not  amount  to  an  estoppel.  In  such  a  case,  the  receipt 
of  a  part  of  the  sum  due  is  not  a  consideration  sufficient  to 
support  a  release  executed  by  the  guardian  to  the  society  in 
full  satisfaction  of  the  entire  sum  due.^ 

Where  payment  of  a  smaller  amount  than  is  actually  due 
the  beneficiary  is  accepted,  a  receipt  in  full  given,  and  the  cer- 
tificate surrendered  on  the  faith  of  the  statement  made  to  the 
beneficiary  by  the  officers  of  the  society  that  such  sum  was  all 
he  was  entitled  to  on  the  certificate,  the  remainder  due  on  the 
certificate  may  be  recovered,  if  such  statement  is  incorrect  in 
law,  and  false  in  fact.^ 

'Ballon  V.  Gile,  50  Wis.  614;7  N.  ^ Tyler  v.   Odd    Fellows'    Mutual 

W.  Rep.  278;  See  Vollman's  Appeal  Relief  Association,  Mass. ;  13  N.  E. 

92  Pa.  St.  50 ;  Stephenson  v.  Stephen-  Rep.  360. 

son,  fi4  Iowa  534 ;  Knights  of  Honor  ^York   Mo.   Mut    Aid   Ass'n.    v. 

V.  Nairn;  26  N.  W. Rep. 826;  Wendt  Myers,  11  Weekly  Notes   of    Cases, 

V.  Iowa  Legion  of  Honor;  34  N.  W.  541. 
Rep.  470. 


ClIAP.  16,  §425.]  PAYMENT    OF    BENEFIT.  435 

A  member  of  a  mutual  benefit  society  died  liolding  a  certi- 
iicate  wliicli  provided  for  the  payment  of  $1000.00  to  his  widow 
on  certain  conditions.  It  was  claimed  that  one  of  these  con- 
ditions was  broken,  in  that  the  member  had  not  paid  his  dues 
and  assessments  promptly,  and  that  the  society  was  not  liable 
to  the  widow  on  the  certificate.  But  the  by-laws  of  the  society 
provided  as  follows:  "  The  heirs  of  a  deceased  jnember,  who 
through  tardy  payment  has  come  out  of  benefit,  can  claim  no 
more  than  $50.00  at  the  death  of  a  male  member,"  The 
society  refused  to  pay  her  anything  on  the  certificate,  but  paid 
her  $50.00,  and  took  her  receipt  in  full  of  all  claim  upon  the 
society.  Afterward  she  brought  an  action  upon  the  certifi- 
cate, and  the  society  set  up  the  payment  of  the  $50.00  in  bar 
of  the  action.  The  court  held  that  the  receipt  of  this  money 
did  not  prevent  her  from  maintaining  an  action  for  the  recovery 
of  the  sum  actually  due.^ 

§  424.  Payment  procured  by  fraud.  AVhere  a 
beneficiary  procures  the  payment  of  the  benefit  fund  to  Ije 
made  to  him,  by  false  and  fraudulent  proof  of  the  death  of  the 
member,  the  member  being  in  fact  still  alive,  the  society  may 
maintain  an  action  against  the  beneficiary  to  obtain  the 
money  so  fraudulently  obtained  by  him.' 

And  such  action  may  be  maintained,  notwithstanding  the 
illegality  of  the  contract  of  insurance,  by  reason  of  the  fact 
that  the  society  was  not  authorized  to  do  business  in  the  state 
where  it  was  executed.' 

§  425.    Settlement  procured  by  fraud  of  society. 

"Where  a  life  insurance  company,  by  its  authorized  agent, 
falsely  and  fraudulently  represents  to  the  assured's  executor, 
whose  mental  faculties  are  at  the  time  impaired  by  age, 
financial  disasters  and  domestic  affliction,  that  sufficient  evi- 
dence has  been  discovered  to  avoid  the  policy,  and  that  such 
company  will  contest  and  defeat  its  collection,  and  thereby 
procures  a  settlement  of  the  claim  and  surrender  of  the  policy, 
by  payment  of  an  amount  grossly  unjust  to  the  estate  of  the 
assured,  such  settlement  may  be  set  aside,  and  the  remainder 
due  on  the  policy  recovered.  The  fact  that  the  insurance  com- 
pany paid  such  money  to  the  executor  a  few  days  before  he 

•  Klapka  v.  Order  Germania.  7  N.  ''  N.  W.  Mutual  etc.  v.  Elliott,  5  Fed. 
Y.  VVeoklv  Diiz:.  VM\  See  Kyau   v.     Rep.  225. 

Ward,  48  N.  Y.  207.  ^  N.  W.  Mutual  etc.,  v.    Elliott, 

iupra. 


436  PAYMENT   OF    BENEFIT.  [ClIAP.  16,  §426. 

could  have  legally  demanded  and  enforced  its  payment  is 
immaterial,  where  it  does  not  appear  that  sncli  payment 
constituted  any  part  of  the  consideration  for  the  settlement.' 
But  a  beneficiary,  who  has  "settled  his  claim  against  the 
society  disadvantageously,  under  pressure  not  amounting  to 
fraud,  cannot  maintain  an  action  for  further  recovery. = 

§  436.  Proceedings  to  obtain  payment  of 
jndg'nient.  The  widow  of  a  deceased  member  of  a 
mutual  benefit  society,  having  obtained  judgment  against  the 
society  for  the  amount  of  the  benefit  due  her  as  such  widow, 
and  execution  on  the  judgment  having  been  returned  unsatis- 
fied, applied  to  the  court  in  which  the  judgment  was  rendered 
for  a  mandamus  to  compel  the  society  to  make  an  assessment 
upon  the  members  of  the  society  sufficient  to  pay  the  judg- 
ment. The  Supreme  Court  of  Michigan,  in  deciding  that  such 
an  action  could  not  be  maintained,  said:  "The  respondent  is 
a  corporation  existing  under  the  laws  of  this  state.  The  relator 
has  obtained  a  judgment  against  the  corporation,  and  execu- 
tion has  been  returned  unsatisfied.  No  further  proceedings 
at  law  can  be  resorted  to  to  enforce  collection.  Whether  the 
corporation  is  solvent  or  insolvent  cannot  be  made  to  appear 
until  an  investigation  has  been  had.  Whether  the  sequestra- 
tion provided  for  under  the  statute,  (How.  St.  §  8153)  is  proper 
or  not,  or  whether  resort  should  be  had  to  assessments  to  sat- 
isfy the  relator's  claim,  are  questions  that  cannot  be  propei'ly 
considered  upon  this  motion.  They  necessarily  involve  a  con- 
struction of  the  statute  under  which  respondent  company  is 
organized,  and  a  construction  of  the  articles  of  association,  and 
the  by-laws  made  thereunder  as  well;  and  that  construction 
will,  to  a  greater  or  less  extent,  be  modified  by  circumstances 
surrounding  each  particular  case  wherein  it  is  sought  to  be 
applied.  It  is  manifest  that  mandamus  is  entirely  inadequate 
in  this  class  of  cases,  and  that  equity  alone  can  furnish  the 
proper  remedy.  Sequestration  can  be  had  in  no  other  court. 
The  examination  of  the  affairs  of  a  corporation,  and  the  legal 
proceeding  by  which  its  assets  are  taken  and  applied  to  the 
payment  of  its  debts,  are  particularly  subjects  of  equitable 
cognizance,  and  what  acts  should  be  done  or  performed  by  its 
officers  in  the  payment  of  its  debts  can  only  be  ascertained 

'McLean  v.  Equitable 'Life   etc.    105;    Ins.  Co.  v.  Brown,  33  Ohio  St- 
100  Ind.  127.  288. 

*  Maguire    v.    Ins.  Co.,  23  Mich. 


Chap.  16,  i'lST.]        payment  of  benefit. 


437 


and  enforced  when  the  true  situation  of  the  corporation  is 
fully  known,  and  its  ability  to  pay  and  means  of  payment  are 
judicially  established.  A  court  of  equity  is  the  proper  forum 
for  such  proceedings,  and  the  writ  in  this  case  must  therefore 
be  denied.' 


§    437.    Restricting:    opertitioii     of    judgineiit 

against  society.  After  a  general  verdict  has  been  rendered 
against  a  mutual  benefit  society  for  a  breach  of  its  covenant  to 
make,  levy  and  collect  assessments  on  its  members  to  pay  the 
plaintiff's  claim,  it  is  error,  in  the  judgment,  or,  after  judg- 
ment rendered  thereon,  by  order,  to  restrict  the  operation  of 
the  verdict,  judgment  and  execution  to  assessments  collected 
and  to  be  collected  by  the  society  from  its  members.  The  ver- 
dict in  such  a  case  is  the  amount  of  damages  for  the  default 
of  the  society,  and  judgment  should  be  for  that  amount  abso- 
lutely. Having  a  judgment  in  his  favor  for  the  amount  of 
his  damages,  the  plaintiff  has  the  undoubted  right  to  collect  it 
by  any  means  the  law  aft'oi'ds  him.  * 

lives,  the  circuit  court  within  the 
proper  county  may  sequestrate  the 
stock,  property,  things  in  action,  and 
effects  of  such  corporation,  and  may 
appoint  a  receiver  of  the  same." 

^  Seitzinger  v.  New  Era  Life 
Association,  111  Pa.  St.  557;  Mo- 
Knight  V.  New  Era  Life  Associa- 
tion, 15  Weelily  Notes  of  Cases, 
400. 


'  Miner  v.  Mutual  Ben.  Ass'n., 
Mich. ;  31  N.  W.  Rep.  763.  How. 
St.  i;  8153.  "  Wlienever  a  judgment 
at  law  or  a  decree  in  chancery 
shall  be  obtained  against  any  corpo- 
ration under  the  laws  of  this  state, 
and  an  execution  issued  thereon  shall 
have  been  returned  unsatisfied  in 
part  or  in  whole,  upon  the  petition 
of  the  person  obtaining  .such  judg- 
ment or  decree,  or  his   representa- 


INDEX. 


IlEPERENCES  ARE  TO  SECTIONS. 


ACTION  AT  LAW.— See  Pleading,    Evidence,  Burden  of  Proof, 
Measure  of  Damages. 

proper  parties  to  actions 92 

tor  property  of  unincorporated  society 93 

by  "  treasurer  of  "  unincorporated  society.  94 

by  members  of  unincorporated  society,  as  such 95 

against  member,  plea  of  former  recovery 97 

for  recovery  of  assessments  paid 98 

for  damages  for  expulsion _.83,  84 

for  libel  and  slander Ill 

between  members  of  unincorporated  society 112 

limitation  of  actions 64,77,  370,  372 

on  by-laws 356,360,369,380,383 

on  contract  of  society, 356,  3G9,  392 

on  contract  of  insurance 384  et  seq. 

by  original  beneficiary -- 375 

pleading,  breach  of  promise  to  pay 393 

breach  of  promise  to  pay,  evidence 395 

plea  setting  up  no  fund  raised 397 

pleading  in,  demand  for  assessment 396 

on  contract  of  insurance,  nominal  damages. 403 

on  contract  of  insurance,  substantial  damages 405 

restricting  operation  of  judgment  against  society 427 

interpleader,  etc 422 

proceedings  to  obtain  payment  of  judgment 426 

misjoinder  of  parties 374 

APPEAL, 

resort  to  court  is  not  an  appeal  from  society 48 

effect  of  appeal 76 

when  member  must  appeal 79,  133,357,360,  362,  364,369 

from  void  judgment 79 

delay  of  societ v  in  acting  on, 80 

when  decision  of  tribunal  "shall  be  final" 81,  357,  360,  369 

death  pending  appeal 82 

ASSESSMENT. 

must  not  be  premiums 3,  23 

levied  by  foreign  corporation 21 

e.xpul.sion  for  non  payment  of, 41,  65 

plan  of  assessment 276 

(43!)) 


440  INDEX. 


ASSESSMENT.— Con«mue(Z.  references  are  to  sections. 

liability  of  member  for, 276,  351 

must  be  properly  laid,  and  for  proper  purposes 277 

improperly  laid 27'.> 

levying  of,  is  ministerial  act 280 

in  anticipation  of  losses 283 

notice  of, 284,  299 

service  of  notice  of, 285,  286 

notice  of,  by  mail ,285,  289,  290,  292 

notice  of,  days  of  grace - 287 

day  of  notice  is  excluded 288,  289 

date  of  notice  of, 289,  292 

!    date  of,.  „ 292 

notice  of  date  of  payment, 294 

notice  by  publication... 293,  297,  298 

insufficient  notice  of, _ 295 

payment  of, 294,  300 

custom  of  paying, 301 

paid  by  beneficiary,  equitable  lien 193,  note 

payment  of  cannot  be  enforced 276,351 

payment  to  subordinate  lodge 303,335 

death  of  member  with  time  for  payment 287,288 

payment  of,  afterloss. 335 

payment  of,  received  on  condition 336,339 

paid  by  stranger,  equitable  lien ..193,  note 

effect  of  return  after  payment 336,  344 

evidence  of  non-payment,  member's  declaration 377 

receipt  of,  may  be  contradicted „ —     304 

tender  of 305,  324 

refusal  of  society  to  accept 306 

forfeiture  for  nonpayment -     307 

excuse  for  non-payment,  custom  of  society 326,  329 

excuse  for  non-payment — insanity,  act  of  God 329 

excuse  for  non-payment,  Sunday,  Thanksgiving  Day 330 

excuse  for  non-payment,  set-off 333 

recovery  of, ^ 334 

retained  by  society,  waiver  of  forfeiture 335,  341 

receipt  of,  estoppel  in  pais 342 

attempt  to  collect,  waiver  of  forfeiture 345,  348 

promise  to  receive  past  due, 349 

effect  of  levy  on  claim  for  benefits 350,  398 

unpaid,  are  not  assets- 276,  351 

property  of  society  in  fund ..-354,  355 

pleading,  neglect  to  levy  assessment 393,  397 

averment  of  demand  for, 396 

evidence  of  amount  that  might  have  been  realized  by, 399 

jurisdiction  in  equity  to  compel  levy  of,.. 389,406,  426 

ASSIGNMENT, 

of  benefit  fund 191, 198,  355 

paj^ment  to  assignee 417 

of  certificate 191,1 98 

assignee  of  certificate  bound  to  know  by-laws 117,  167 

ATTACHMENT, 

when  fund  may  be  attached 199,  200 


I^•DE\'.  441 


REFERENCES  ARE   TO    SECTIONS. 

BENEFICIARY.    See  Designation  and  Changb  op  Beneficiary,  Who 
MAYBE  Beneficiary. 

property  of,  in  benefit  fund 16,  18,19,201,202,  354 

when  beneficiaries  take  equally 257,  265 

action  on  certificate  by  original, 375 

action  on  certificate  by  new, 375 

payment  of  benefit  fund  to  wrong  person 416 

inserting  name  of,  in  certificate  after  death  of  member 228,  269 

fund  payable  "  as  member  may  direct  "...184,  207.  215,  233,  272,  377 

charter  beneficiaries 213,  218,  224.232,  235,  245«. 

legal  representatives 188,  203,  234,  237,  258.  263,  265,  272 

wife  or  widow  of  member.. 181,  193,  222,  223,  226,  227,  228.  230,  232, 

233,  238  e«  562.251,254,  202,417, 

wife  and  children 243 

wife  "  for  benefit  of  herself  and  children,"  etc 242 

child  of  member 245,  259 

child,  grandchild 245a 

children  born  after  issuance  of  certificate 246 

heirs  of  member 186,240  247  et  seg. 

orphans .._ 259 

family  of  member 180,  182,  233 

mother  of  member 186,  189,230,233 

"  as  designated  in  last  will  " 236,  237 

devisees 236,  237,  377 

creditor  of  member 187,  189,  232 

"guardian  of"  member 268 

"my  estate".. 185,  188,  203,  262 

survivor  of  two  persons 205,266a. 

betrothed 193,  233 

"friend  of"  the  member 7 

ulii'a  vires 7,10 

BENEFIT  FUND.    See  Sick  Benefits. 

when  by-laws  relating  to,  may  be  changed 16,  19 

reasonable  by-laws  concerning  forfeiture  of, 26,  27 

vested  right  HI 16,18,  19,201.202 

equitable  lien  on, 193,  note. 

equitable  assignment  of, 193 

law  governing  distribution  of, 171 

when  beneficaries  take  equally 257,  265 

agreement  between  member  and  beneficiary  as  to  fund 267 

intere.st  of  society  in, 354 

vote  disposing  of 125,  127,  140,  150 

misa]>plication  of, 1,  118,  122,  142,  144,145,  147,  148.  150 

when  it  is  a  trust  fund 147,  354 

duty  of  ofiicers  to  protect  it 118,  145.  148,  354 

adultery  of  wife  or  widow,  effect  on  right  to, 241 

payment  of,  not  a  gift 415 

payment  of  whole  amount  of, 417 

payment  from  reserve  fund 133,  282.  421 

member  maj-^  not  enjoin  payment  of 420 

payment  of,  to  wrong  person 416 

suspension  of  jiaymentof, 303,364 

payment  of  smaller  amount  than  is  due 423 

payable  "  as  member  may  direct" 184,  207,  215,  272 


442  INDEX. 


BENEFIT  FUND.— Continued.                             references  are  to  sections. 
evidence  of  amount  that  might  have  been  realized  by  assess- 
ment      399 

when  limit  is  set  to  amount  that  will  be  paid 394,  401,  409,  411 

effect  of  expulsion  on  claim  for, 418,  414 

attachment,  garnishment  of, 199,  200 

assignment  of, 191,  198,  355 

paid  to  assignee  of  certificate 417 

BOARD  OF  TRADE, 

seat  may  be  sold 21 

reasonable  by-laws  of 22,  26,  27 

expulsion  from 41,  42,  43,  54 

injunction  to  restrain  expulsion  from 86 

BURDEN  OF  PROOF, 

"good  standing"  of  member 174,  376 

of  false  statements  in  application 374 

where  change  of  beneficiary  has  been  made 375 

damages  for  breach  of  contract  of  insurance 401 

where  maximum  amount  that  will  be  paid  is  specified  in  con- 
tract of  insurance 409,  411 

BY-LAWS, 

inherent  power  of  society  to  pass, 11 

power  to  pass  is  continuous 124 

unwritten,  custom 14 

void  in  part -- 16 

must  be  legal 20,  25 

expostfacto  by-laws 22 

must  be  consistent  with  charter 23 

of  incorporated  society,  must  be  reasonable  and  necessary 26 

how  may  be  adopted 13 

repeal  of - 16 

alteration,  amendment,  suspension 16,  19 

are  part  of  contract  of  insurance 117 

amending  contract  of  insurance 166,  166a. 

construction  of 15,62,362,367,375 

against  common  right  strictly  construed 362,  367 

govern  subordinate  lodges 13,  321 

member  bound  to  know  them 12,  166 

assignee  of  certificate  bound  to  know  them 117,  167 

must  be  binding  on  all  members  alike 13 

when  binding  on  stranger 13,  54 

when  binding  on  member 12,  20,  23,  33,  166,321 

waiver  of, 13,  321 

waiver  or  suspension  of,  by  officer 117,  331 

contract  with  regard  to  future  by-laws 166 

provisions  concerning  changes  of  beneficiaries 221,228 

concerning  reinstatement 321  et  seq. 

actions  on,  for  benefits 380,  385 


C. 

CERTIFICATE,    See  Contract  op  Insurance. 

failure  to  take  out 166  a.  271 

delay  in  issuing ..169  a- 


INDEX.  4-i3 


CERTIFICATE. — Continued.  references  are  to  sections. 

delivery  of,  to  member. 170 

delivery  of,  to  beneficiary, 192,  193,  204,  219,  223 

loss  of, 193 

indorsements  on  back  of, 172  «. 

attacliment,  garnishment 199,  200 

right  to  assign 191 

assigned  as  collateral  security 191 

designation  of  beneficiary  not  an  assignment  of, 192 

equitable  assignment 193 

limitation  upon  right  to  assign 194 

illegal  assignment 195 

providing  for  assignment 19d 

consent  of  society  to  assignment 197 

rights  of  assignee 117,  167,  198 

payment  to  assignee  of, 417 

reformation  of, 269 

prima-faeie  evidence  of  good  standing 376 

number  of  certificates  issued,  evidence  of  number  of  members    400 

CHARGES, 

against  member  of  incorporated  society 53 

against  member  of  unincorporated  society 64 

imputing  disgraceful  conduct 65,  314 

of  offensive  language 43,  53,  74 

allegation  as  to  time  when  oflEense  was  committed 64 

must  be  proved 74 

answering, 69 

notice  of 65,  68,  71 

when  notice  of,  need  not  be  given 66 

sufficiency  of  notice 70 

records  must  show  notice  of,  to  expelled  member 67,89 

acquittal  of, 75 

CHARTER, 

is  fundamental  law  of  society 1 

society  and  member  bound  by, 1,  98 

prescribing  conditions  of  membershij) 23,  28 

power  of  expulsion  conferred  by 40 

revocation  of 153 

effect  of  procuring,  on  property  and  rights  of  society  1,  26,  59,  98, 160 

act  amendatory  of  organic  law 142 

provisions  concerning  changes  of  beneficiaries 220 

provisions  for  assessments 277,  278 

CHURCH. — See  Religious  Societies. 

CLUB, 

liability  of  members  for  debts  of 100,  101 

expulsion  from 43,  60,  62,  64 

CONSTITUTION.— See  CiiAnTEU.  By-Laws. 

is  fundamental  law  of  unincorporated  society 1 

when  becomes  part  of  cliarter I 

by-laws  must  conform  to 1,24 

provisions  concerning  changes  of  beneficiaries 226 

CONTRACT  OF  INSURANCE.— See  Certificate. 

wagering  contract 21 

is  between  society  and  member 142,  171,  201,  202 


444  INDEX. 


CONTRACT  OF  INSJJRAl^CE.— Continued,    keferexces  are  to  sections. 

governs  member's  rights 165 

what  coustitutes IC),  1G6(/. 

when  executed 107,  169 

where  executed 168 

void  if  issued  after  death  of  m^^mber 169 

dehiy  in  accepting  application 169a. 

construction  of, 171,  176,201,202 

interest  of  beneficiary  in, 201,  202 

action  at  law  on, 356,360,  384  e(  seq. 

different  phins  of  benefit  insurance 384 

remedy  in  equity  for  breach  of, 389,  406,  407 

contract  to  resort  to  equity  for  breacli  of  contract 391 

adequate  remedy  at  law  for  breach  of 392,  406 

where  limit  is  set  to  amount  of  benefit  fund 394,  899,  401,  404 

not  a  contract  of  indemnity 402 

nominal  damages  for  breach  of,.. 403 

substantial  damages  for  breach  of, 405 

COURTS. — See  Tribunal  op  Society. 

remedy  in  society  must  be  exhausted  before  resort  may  be  had 

to, 79,  130,  131,  141.  357  etseq. 

visitor! al  power  of,...' 129 

are  loth  to  take  jurisdiction  over  affairs  of  society 130,  131 

will  interfere  only  to  protect  civil  or  property  rights 131 

may  not  be  ousted  of  j  urisdiction 1 32,  357  et  seq. 

when  courts  will  not  take  jurisdiction 133 

will  not  regulate  matters  of  internal  government 133,  134,  147 

how  courts  regard  unincorporated  society 137,  138,  139 

ecclesiastical  j  urisdiction 155 

inquiry  into  systems  of  religious  faith 155 

to  establish,  is  an  attribute  of  sovereignty 357  et  seq. 

agreement  that  no  action  shall  be  brought  in, 357,  369 

every  citizen  is  entitled  to  resort  to, 369 

jurisdiction  in  equity  to  compel  assessment  to  pay  death  loss 

; 389,  406,407 

agreement  to  resort  to  equity 391 

CUSTOM  AND  USAGE, 

cannot  take  place  of  by-laws 14 

in  expulsion  of  members _ —       58 

must  be  proved  as  facts 58,  155 

for  churches  to  deal  with  members  for  scandalous  conduct 109 

as  to  salaries  and  compensation  of  officers 122 

of  paying  assessments 171,  301 

in  levying  assessment .-     281 

in  receiving  past  due  asssessments 326, 328 

in  giving  notice  of  assessments 326,  328 

as  an  excuse  for  non-payment  of  assessment 326 

of  abiding  by  decisions  of  tribunals  of  society  not  binding 367 


D. 

DEATH  OF  MEMBER, 

before  issuance  of  certificate 166a,  169,  169a,  271 

before  time  for  payment  expires 287,  288,  294 


INDEX. 


445 


KEFEUENCES  ABB   TO   SECTIONS. 

DESIGNATION  AND   CHANGE  OF  BENEFICIARY.— See  Be- 
neficiary, Who  MAY  be  Beneficiary. 

•where  no  designation  is  made 166a,  271 

incomplete  designation - 2~0 

beneticiary  has  no  vested  rights 201,  20../ 

right  to  change 201,  219 

where  right  to  devise  fund  is  conferred  by  charter 209 

how  change  is  to  be  made 200,  220,  221  et  seq.  227  et  seq. 

charter  provisions  concerning  changes 220 

when  designation  by  will  is  invalid 210,  215,  218,  223 

by  will...: 193,  208,  209,  210,  223  e<  seg.  229 

what  is  not  a  designation  by  will •     218 

power  of  appointment 211,  215 

when  power  to  change  is  exhausted - 216 

time  within  which  power  of  appointment  may  be  exercised 217 

designation  by  special  direction _. 218 

when  society  has  waived  formal  designation - 220 

inoperative  change  does  not  revoke  original  designation 230 

fraudulent  change 231 

to  whom  payment  of  benefit  fund  may  be  made 419 

burden  of  proof  where  change  has  been  made 375 

DISSOLUTION,  . 

of  unincorporated  society i'Sy.  i^^* 

of  incorporated  society 142,  144 

when  will  not  be  decreed 140,  141 

by  act  or  neglect  of  society - 143 

notice  of  meeting  for  vote  on, 140 


EXPULSION.— See  Suspension,  Forfeiture. 

expulsion,  suspension,  a  motion --      34 

from  incorporated  societies 30,  37,  39 

corporate  offenses 38,  41 

neglect  of  religious  duties  as  a  cause  of,. 33,  44 

for  minor  offenses 40 

surrender  of  power  of, 47 

charges  against  member  of  incorporated  society,. 53,  54 

reinstatement  to  membership  in  incorporated  society 48,  49,50 

from  unincorporated  society _- 55,  00 

reinstatement  to  membership  in  unincorporated  society 61,  64 

where  power  of,  i-esides 72 

power  of  expulsion  may  not  be  delegated 72 

must  be  in  good  faith - 61,  78 

of  insane  member 75,  32!( 

void  judgment  of 79,  83,  89 

records  of  j)roceedings  in - 89 

damages  for  wrongful  exjjulsion 83 

effect  of  action  for  damages 84 

effect  of,  on  right  to  benefit  fund 356,413 

EQUITY.— See  Courts, 

reinstatement  of  expelled  member 63,  85 

when  courts  of,  will  not  interfere 133 


446  INDEX. 


EQUITY.— Con^mued  references  are  to  sections. 

dissolution  of  unincorporated  society 139 

dissolution  of  incorporated  society 143 

dissolution,  trust  funds,  property 144 

no  ecclesiastical  jurisdiction 155 

property  and  trusts  of  religious  Societies 159 

remedy  in,  for  breach  of  contract  of   insurance 389,  390,  406,  407 

EVIDENCE.— See  Burden  op  Proof. 

of  "  good  standing  " _ 44,  174,  376 

parol,  to  show  what  beneficiary  is  to  do  with  the  fund 267 

parol,  to  show  number  of  members 386,400 

when  policy  is  payable  to  stranger 374 

false  statements  in  application,  burden  of  proof 374 

of  declarations  of  member  concerning  forfeiture 377 

effect  of  collection  of  assessment 350,  398 

when  limit  is  set  to  amount  that  will  be  paid 394,  395,  401 

of  amount  that  might  have  been  realized  by  assessment 399 


F. 

FINE, 

provision  for 60,  91 

FORFEITURE, 

societies  may  make  provision  for 23,65 

charter  provisions  concerning 23,  116 

for  non-payment  of  membership  fee 275 

for  non-payment  of  assessment 307  et  seq. 

must  be  provided  for 307 

when  affirmative  act  of  society  is  required 310-313 

nunc  pro  tune,  after  loss 312 

before  expiration  of  specified  time.. 312 

when  no  act  of  society  is  necessary 276,  314-320 

statements  of  member  concerning,  inadmissible 377 

waiver  of 116,317,335-341,345 


GARNISHMENT, 

of  benefit  fund 199,200 

GOOD  FAITH, 

in  procuring  policy 41,  374 

must  characterize  proceedings  of  society 61,78 

GOOD  STANDING, 

when  member  is  in, 324 

evidence  of ,    376 

burden  of  proof 174,376 

obedience  to  provisions  of  contract  concerning  religious  duties  44, 174 

violation  of  pledge  of  total  abstinence 174 

forfeited  for  non-payment 318,  319,320 


INDEX.  447 


H. 


HEIRS  REFERENCES  ABE  TO  eECTIONS. 

designation  of  heirs 186,  240,  247,  et  seq. 

who  are  beneficiaries  under  designation  of, 247,  256 

when  widow  takes  under  designation  of, 248,  249,  251,  254,  255 

next  of  kin 256 

in  what  proportion  they  take  the  fund 257 

I. 

INCORPORATED  SOCIETY, 

corporation  de facto,  not  de  jure 2,  99 

where  object  is  civil,  not  religious 44 

effect  of  incorporation 1,  2,  59,  160 

when  unincorporated  society  becomes  incorporated..!, 26, 59, 98,  160 

act  amendatory  of  organic  law 142,  189 

must  be  organized  under  proper  statute 2 

object  of  society  must  be  legal 5 

how  plan  of  doing  business  should  be  set  forth 4 

plan  of  doing  business  must  be  authorized  by  organic  law. 3, 136,  142 

when  existence  ma}'  not  be  attacked 6 

may  not  be  controlled  by,  foreign  corporation 21,  279 

when  corporate  acts  are  binding 127 

vltra  vires 7,10 

inherent  power  to  pass  by-laws 11 

by-laws  must  be  reasonable  and  necessary 26,59 

admission  to  membership 28,  29 

membership  in,  is  property 48,  62 

expulsion,  suspension,  amotion 34 

power  of  amotion 35 

power  of  expulsion 36^8 

surrender  of  power  of  expulsion 47 

reinstatement  to  membership 48 

charges  against  members 53 

remedy  of  expelled  member 49,  50,  79,  85,  86 

liability  of  member  for  debts  of, 98, 99 

provisions  for  adjusting  controversies  between  members, 

21,  54,  79,  131,  141,  357  et  seq. 

visitorial  power  of  courts 59, 129 

rights  of  seceding  members 151,  152 

corporate  and  contract  rights  of  members • 165 

dissolution  of 142-153 

INJUNCTION. 

to  restrain  illegal  expulsion 63, 85 

to  reinstate  expelled|member 86 

restraining  libel  on  society 96 

jurisdiction  of  courts 129 

interfering  with  internal  management 134 

to  restrain  illegal  act  of  society 135 

to  restrain  society  from  carrying  on  business 136 

to  restrain  threatened  misapplication  of  funds 

144,  146,  147,  148,  150, 151,  159 

member  may  not  enjoin  payment  of  benefit  fund 420 

INTERPLEADER,  See  Action  at  Law. 


448  INDEX. 


J. 


JUDGMENT,  REFERENCES  AIIE  TO  SECTIONS. 

of  expulsion,  when  void 62,  65,  79,  83,  89 

against  unincorporated  society 97 

proceedings  to  obtain  payment  pf 426 

restricting  operation  of 427 

"  shall  be  final  " 81,357,360       ;i 


K. 

KNOWN  VIOLATION  OF  LAW, 

forfeiture  of  contract 176 


L. 

LIABILITY  OF  MEMBER, 

for  debts  of  incorporated  society 98 

where  attempted  incorporation  is  invalid 99 

for  benefits - 104 

incurring  the  debt 105,  106 

debt  "  payable  out  of  the  funds  of  the  society" 107 

notice  of  withdrawal  from  society 108 

for  debts  of  unincorporated  society 100-115 

for  assessments  levied  by  society 276,  278 

LIBEL  AND  SLANDER, 

charges  of,  against  member 53 

inj unction  restraining ^ 96 

privileged  communications 109 

LIMITATION  OF  ACTION, 

when  statutes  of  limitations  do  not  apply  to   proceedings  in 

expulsion 64,  77 

limitation  as  to  time  when  action  may  be  Brought 370 

limitation  as  to  place  where  action  may  be  brought 372 


M. 

MALICE 

vitiates  proceedings  in  expulsion. 61 

competent  evidence    of, 7S 

must  be  proved  when  charged 78 

in  libel  and  slander ^ 109,  110 

MANDAMUS, 

to  reinstate  member 48,  49,50 

proper  remedy  to  reinstate  member  in  incorporated  society...  48, 49 

is  a  discretionary  writ 50,51 

when  right  to,  for  reinstatement  is  waived 84 

not  proper  remedy  for  reinstatement  of  member  in  unincor- 
porated society 63 

return  to  writ 52,53,  54,  67,  72,  74 

jurisdiction  of  courts 129 

to  compel  levy  of  an  assessment  to  pay  claim  of  beneficiary..      388 
to  compel  levy  of  assessment  to  pay  judgment  against  society.      426 


1 


INDEX.  449 


MARRIAGE  ASSOCIATIONS,                             keferences  are  to  sectioks. 
when  illegal 5 

MEASURE  OF  DAMAGES, 

nominal  damages  in  action  at  law, 403,  404 

substantial  damages  in  an  action  at  law 405 

when  maximum  amount  that  will  be  paid  is  specified  in  con- 
tract of  insurance 409-411 

in  a  cei'tain  case 412 

MEDICAL  EXAMINATION, 

when  physician's  certificate  may  be  required 323,  324,  380-383 

MEDICAL  SOCIETY, 

tariflEof  fees  unlawful 21,  27,  44 

expulsion  from 42 

.  charges  against  member 53,  54 

MEETINGS, 

special  meeting  for  election ^ 31 

voting  by  proxy 120 

members  should  vote 125 

notice  of 123,140 

rules  governing  future  meetings 124 

quorum  of  members 126,  127 

exclusion  of  member  from, 139 

MEMBERSHIP, 

admission  into  incorporated  societies 28,29 

admission  into  unincorporated  societies. 30 

application  for,  refused,  rights  of  person 28,  29 

election  to 31 

election  procured  by  fraud 31,  41 

who  are  members  of  benefit  society , 32 

minor  may  not  be  member  of  mutvial  benefit  society 142 

in  religious  corporations 33 

in  subordinate  organizations 32,  66,  67,  88,  303,  316,  321,  34a 

expulsion  from  incorporated  society 36-47 

expulsion  from  unincorporated  society 55.  61 

reinstatement  to  membership  in  incorporated  society 48-54 

reinstatement  to  membership  in  unincorporated  society 61-64 

reinstatement  after  suspension  or  forfeiture 321  et  seq. 

MEMBERSHIP  FEE, 

note  given  for 273 

cash  payment  of 274 

waiver  of  cash  payment 274 

recovery  of  from  society 275 

MUTUAL  BENEFIT  SOCIETY, 

what  is  not 23 

not  for  profit 3 

generally 162 

when  object  is  civil,  not  religious 44 

its  object  is  insurance 44.  163,  164 

merits  of  dilferent  plans  of  insurance 162 

when  may  reinsure  members 1,  145,  146 

minor  may  not  be  member  of 142,  171 

rights  of  members  in,  are  two- fold 165 


450  INDEX. 


MUTUAL   BENEFIT   SOCIETY.— Cotti'd.        heperences  are  to  sections. 

membership  in  subordinate  body 32,  88,  303,  316,  3-31,  343 

charges  against  member '^^'  2^ 

by  what  hiws  governed 164,  177,  279 

efiect  of  amendment  of  organic  law 142, 189 

right  to  establish  courts s... .37,  48,  61,  129,  130,  133,356-369 

what  statutes  apply  to - 21 

what  are  trust  funds  of,  .- ....147,  354,  355 

when  unincorporated,  is  it  a  partnership? 104,  111,  137,  138 

subordinate  and  co-ordinate  lodges 32, 8S,  303,316,  321,343 

;    liability  of  ofKcers  of, 118 

dissolution  of 140-143 


N. 

NOTICE, 

in  proceedings  in  expulsion - 65 

when',  need  not  be  given 66 

service  and  proof  of, --        67 

to  firm - - - -        67 

waiver  of 68 

records  must  show  notice  to  expelled  member - 67, 89 

waiver  of  sufficiency --        70 

given  on  Sunday 71 

of  assessment 284-299 

sufficiency  of 286,  287 

manner  in  which  must  be  served 286 

day  on  which  it  is  served  is  excluded - -.. 288,  289 

by  mail 285,289,290,292 

personal  serviceof.. 285 

date  of. .> 289-292 

by  publication - 293 

to  be  given  by  a  particular  person 296 

insufficient  notice - -       295 

directing  how  assessment  shall  be  paid 300 

of  forfeiture  for  non-payment : 308  et  seg. 

custom  of  giving  notice - 326-328 

that  agent  is  acting  beyond  his  authority 332 


O. 

OFFICER, 

powers  and  duties 116,  117,  148 

appointments  made  by -.        74 

power  to  levy  assessments 277 

when  acts  of,  bind  members 103 

officers  acting  in  aggregate  and  administrative  capacity.. 78,  103, 122 

election  of. 120 

•  may  not  construe  contracts  so  as  to  bind  the  courts 171,  301 

statements  of,  as  an  excuse  for  non-payment  of  assessment —      331 

acts  of  ministerial  officers,  waiver  of  forfeiture 348 

by  whom  vacancy  in  office  must  be  filled 23 

vacancy  in  office 35 

holding  over 121 

persons  acting  publicly  as  officers 119 


INDEX.  451 


OFFICER.— Continued.  kefeuences  are  to  sections. 

power  of  amotion 35 

expulsion  for  fraud 41 

of  unincorporated  society,  not  subject  to  quo  warranto 120,  156 

of  religious  society 161 

courts  will  not  interfere  M'ith  discretion  of 133,  134,  161,  282,  421 

salary,  commission,  fees  of, 122,  151 

rector  suing  for  salary 156 

liability  on  bond  of, ..118,  121 

liable  for  debts  of  corporation 98 

liability  for  debts  of  unincorporated  society 100,  102,  105,  112 

liability  of  officers  of  mutual  benefit  society 118 

must  account  for  monej^  in  his  hands 145,  148 

management  of  funds  and  property  of  society 148,  149 

refusal  to  transfer  fund  or  property  to  successor 149-152 

fraudulent  purchase  of  jiroperty  for  society 148 


P. 


PAYMENT. — See  Assessment,  Non-Payment. 

of  as.sessment, 294,  300,  302 

of  assessment  cannot  be  enforced, 276,  351 

custom  of  making,  of  assessments 301 

notice    of  date  of, 294 

of  assessment  to  subordinate  lodge 303,  313,  335 

of  assessment  after  loss 335 

of  assessment  received  on  condition 336,  339 

death  of  member  within  time  for 287,  288 

of  assessment  from  reserve  fund '. 421 

of  benefit  fund,  not  a  gift 415 

of  fund  to  assignee  of  certificate 417 

of  benefit  fund  to  designated  beneficiary 418 

change  of  beneficary,  to  whom,  may  be  made 419 

of  benefit  fund  into  court 422 

of  benefit  fund  jirocured  by  fraud 424 

settlement  procured  by  fraud  of  society 425 

of  less  amount  than  is  due,  receipt  in  full 423 

when  fund  is  pa3'able  to  wife 181,  239,  417 

PHYSICIAN'S  CERTIFICATE. 

when  may  be  required 323,  324,  380,  383 

PLEADING 

in  actions  on  certificates 374,  376 

when  insurable  interest  must  be  shown... 374 

when  benefit  fund  is  limited  to  specified  amount 395 

setting  up  that  no  fund  has  been  raised 397 

PROOF  OF  DEATH. 

is  a  condition  precedent 378 

averments  concerning 374 

waiver  of, 1 378 

furnishing,  is  demand  for  an  assessment 396 


452  INDEX. 


PROPERTY  OF  SOCIETY.                                    references  are  to  sections. 
courts  will  interfere  to  protect  civil  or  property  rights  of  mem- 
bers  .131,  1,55 

rights  of  members  in, 151,  152 

rights  of  contributors  to 150 

interest  of  member  in, .-. .138,  151,  152,  161 

purchase  of,  with  trust  funds 148 

in  benefit  fund 351,  854 

of  religious  societies 159 

vote  disposing  of ^ 125,  127,  140,  150 

division  of,  in  case  of  withdrawal  of  members 151,  152,  157 

when  mismanaged  or  wasted 151 

distribution  on  dissolution 144,  153 


Q. 
QUO  WARRANTO. 

against  officer  of  unincorporated  society 120,  156 

legality  of  election 120 

for  dissolution  of  society 142 

jurisdiction  of  courts 129 

H- 
RECORDS  OF  SOCIETY. 

of  proceedings  in  expulsion 89 

may  be  contradicted 89 

must  show  notice  to  expelled  member 67,  89 

showing  suspension  before  specified  time 312 

not  necessary  to  show  agency 102 

libel  and  slander 110 

may  be  made  prima  facie  evidence  of  legality  of  assessment- .  280 

REINSTATEMENT  TO  MEMBERSHIP. 

in  incorporated  society .48,  54 

in  unincorporated  society ..61,  64 

delay  in  applying  for, 51 

when  right  to  reinstatement  is  waived 51,  84 

order  of  reinstatement  must  be  presented  to  society 87 

after  suspension  or  forfeiture 321 

for  any  valid  reason 328,  329,  331 

application  for  reinstatement .821,  325,  377 

application  for,  not  evidence  of  suspension 377 

waiver  of  application  for, 321,  325 

declarations  of  member  concerning, 377 

REINSURANCE. 

what  is, 1 

forfeiture  of, 309 

by  misapplication  of  funds 145,  146 

RELIGIOUS  CORPORATIONS  AND  SOCIETIES. 

mmbership  in 33 

custom  of  expelling  members 58 

expulsion  for  non-performance  of  religious  duties 44,  45,  46 

jurisdiction  of  courts 156 

title  to  church  property 158 

secession  in,  division  of  property 157 

privileged  communications,  libel  and  slander 109,  110 


INDEX/  453 


RESERVE  FUND.  rbperbnces  ark  to  sections. 

assessments  for - — 282 

discretion  in  management  of 133,  147,  431 

RESTORATION  TO   MEMBERSHIP.— See  Reinstatement. 


SICK  BENEFITS.— See  Benefit  Fund. 

action  at  law  for, 356,  360,  380,  383 

reasonable  by-laws  concerning  forfeiture  of, 26,  27,  3G5 

when  by-laws  concerning,  may  be  changed 16,  19 

suspension  of, --     364 

rejection  of  claim  for, 368,  365 

permanent  disability 173,  383 

physical  disability,  what  is 3 

insanity  is  sickness -     173 

"  incapable  of  working" 382 

SUBORDINATE  ORGANIZATION. 

membership  in 32,  66,  303,  343 

expulsion  from 66,  67,  303,  343 

proceedings  in  reinstatement 321 

agency  of 303,321,335 

effect  of  recognizing  delinquent  members 313,316,  343 

notice  of  assessment 284 

what  assessments  are  binding  upon 279 

payment  of  assessment  to. 303,  321,335 

refusing  to  obey  order  of  superior  body 88 

effect  of  suspension  of, 303 

trust  funds  of, 147 

consent  to  dissolution  of  society 143 

dissolution  of, property  and  trust  funds  of, 144,  153 

when  it  divides  into  conllicting  bodies,  decision  of  governing 

body 158 

SUSPENSION.— See  Expulsion. 

suspension,  expulsion,  amotion 34 

from  membershi  p 34 

of  subordinate  lodge 303 

must  be  jirovidod  for 307 

before  expiration  of  specified  time 312 

of  benefits,  attempt  to  collect  assessment 346,  348 

statements  of  member  concerning  his,  inadmissible 377 

SUICIDE. 

when,  forfeits  contract  of  insurance IGG,  175 

SUNDAY. 

notice  given  on, 71 

meetings  on  Sunday 128 

payment  of  assessment  due  on, 329 


454  INDEX. 


TRIBUNAL  OF  SOCIETY.  references  are  to  sections. 

when  must  be  resorted  to 79,  130,  131,  141,  358,  360,  361 

remedies  of  member  in,  must  be  exhausted 79, 130,  131,  141,  358 

_ 369 

delay  or  unjust  procedure  of 80 

appeal  from 79,  130,  358,  360  et  seq. 

irregularly  constituted 72,  72a. 

"whose  decision  shall  be  final" 81,  357,360,  362,369 

as  to  what  members  of,  may  testif}'. 78,  90 

when  conduct  of  members  of,  maj'  be  inquired  into 61,  72,  78,  90 

when  opinions  of  members  of,  may  be  inquired  into 90 

when  may  give  double  sentence 91 

refusal  of,  to  hear  evidence 75,  76 

where  power  of  expulsion  resides 72 

is  a  court- 65,  357 

vote  of,  what  necessary _ 72a.  75 

notice  to,  when  necessary 70,  71 

right  to  trial  by  jury 73 

regularity  of  proceedings 72a  74 

no  presumption  that  there  isa 130 

TRUST  FUNDS. 

what  are 147,354 

disposition  of,  on  dissolution 144153 

change  in  application  of,.. 160 

rights  of  contributors 150 

of  religious  societies 159,  160 

rights  of  members .151,  420 


U. 

ULTRA  VIRES. 

when  by-laws  are  23 

cases  illustrating  doctrine 7,  8,  10 

UNINCORPORATED  SOCIETY. 

constitution  of 1 

power  to  pass  by-laws 11 

by-laws  must  be  legal .20,  25,  59 

by-laws  must  be  consistent  with  constitution. 24 

courts  have  no  visitorial  power  over 59,  129 

admission  to  membership 30,  59 

membership  in,  is  not  property 62 

power  to  expel  members ". 55,  56 

right  to  pass  by-laws  for  expulsion .57 

power  of  expulsion  by  usage 58 

power  of  expulsion  agreed  upon 59,  60 

rights  of  expelled  member,  how  determined 62 

reinstatement  to  membership 61 

remedy  of  expelled  member 63,  79,  85,  86 

proper  parties  to  action 92 

actions  for  recovery  of  property 93 

action  by  treasurer  of 94 

action  by  members,  as  such 95 

judgment  against 97 


INDEX.  455 


UNINCORPORATED  SOCIETY.— Cofti'^f.       rrrerences  are  to  sections. 

eflfect  of  incorporation  of   1,  26,59,98,  160 

liability  of  members  for  debts  of 100,  101,104,  105 

liability  of  members  for  benefits 104 

liability  of  members  for  rents 104 

sued  for  slander Ill 

actions  between  members 112 

officer  of,  is  not  subject  to  quo  warranto  proceedings 120 

rights  of  seceding  members 151,  152 

charitable  bequest  to,..  .     159 

is  it  a  partnership.' 137,  138,  139 

status  in  court _137,  138 

dissolution  of, 139-153 

USAGE.— See  Custom. 

W. 

WHO  MAY  BE  BENEFICIARY. 

wagering  contracts 177 

when  stranger  may  be 178,  179 

family  of  member 180 

wife  of  member 181,  239,  417 

"  benefiting  and  aiding  family" 182 

creditor  of  member .187,  189,  232 

heirs  of  deceased  member 186,  253 

mother  of  deceased  member ..186,189 

divorced  wife 190 

widows'  and  orphans'  fund 183 

"widows'  and  orphans'  fund,"  effect  of  term ..183,  233,  259 

legal  representatives 188,  203,  234,  258 

"my  estate" 185,  188,  262 

when  fund  is  not  payable  to  estate  of  deceased  member 185 

when  member  becomes  beneficiary  by  inheritance 260 

fund  payable  as  member  may  direct 184,  207,  215,  272 

effect  of  amendment  of  organic  law 189 


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